MENU
SEARCHThe series of sales spikes this year that were inspired by shifting U.S. policies defied the drag of those same changes, according to one early forecast.
So far, the tariffs have had limited effect on new-vehicle prices, according to the report. The question is whether we’ve yet seen the full impact of the sweeping duties on auto and auto parts imports.
Pexels/Jeshoot
U.S. new-vehicle sales are forecast to be up 4% for a roller-coaster year buffeted by federal policy changes and inflationary pressures.
A joint J.D. Power-GlobalData report estimates about 13.6 million units will have sold at retail by the time 2025 comes to a close.
The increase comes despite a fourth-quarter decline from sales bumps in the spring and third quarter that were spurred by Trump administration policy changes.
The forecast sees year-over-year December sales down 7% to 1.2 million units and fourth-quarter sales down 5% to 3.4 million. It estimates deliveries in the second half of the year as flat from a year earlier at 6.9 million units.
A spring sales surge as consumers accelerated auto purchases to avoid any trade tariff-induced price increases brought a 173,000-unit bump, according to the forecast. In the third quarter, sales spiked again, this time by more than 304,000 units as many people picked up electric vehicles to lock in expiring federal tax credits.
So far, the tariffs have had limited effect on new-vehicle prices, according to the report. The question is whether we’ve yet seen the full impact of the sweeping duties on auto and auto parts imports.
The forecast foresees a potentially positive outcome of the tariffs and the end of the EV tax credit in “the recalibration of OEM production schedules to accommodate new tariff realities and EV requirements.” Those shifts will help increase demand and reduce pressure on OEM and retailer profit margins, said Thomas King, J.D. Power’s OEM solutions president. Less focus on sales of pure EVs removes the pressure of the deep discounts needed to juice their sales, he pointed out.
Still, the reality remains that new-vehicle prices are still near record highs. The average transaction price in December is projected to be $47,104, up 1.5% year-over-year. The average used price is $29,571, still high in part due to reduced vehicle production during the pandemic, along with low lease maturities and subdued manufacturer discounts. Meanwhile, 27% of trade-ins are expected to be under water this month, up four percentage points year-over-year.
LEARN MORE: A Preowned Vehicle Strategy in a Challenging Market
Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.
Read More →
A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.
Read More →
A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.
Read More →
A group out West picked up the major D.C.-area collection, putting it in the upper tiers of private automotive groups in the U.S.
Read More →
Lenders loosened access for subprime borrowers, and consumers with negative equity reached a record high, Cox Automotive reported.
Read More →
U.S. consumer interest in electric vehicles lags behind other countries despite the rising gas prices caused by the ongoing war in the Middle East.
Read More →
Research reveals the brands and models most likely to have higher recall rates over their lifetimes. While some brands rank high, addressing safety issues can be a selling point.
Read More →
Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.
Read More →
Cox Automotive research shows both the opportunities and the challenges in turning consumers’ growing affordability needs into increased fixed-operations revenue.
Read More →
The partner you choose for growth and expansion is key, because better is the ultimate goal instead of growth for growth’s sake.
Read More →