The U.S. auto sales market has slowed down significantly after a brief surge in spring, as consumers become more cautious about buying cars due to concerns over the economy and tariffs on imported vehicles.
Industry researcher J.D. Power estimates that second-quarter sales increased by 2.5% from last year’s period, but momentum has since subsided, with annual automotive selling rates likely falling to 15 million in June, the slowest pace in the last 12 months.
“The party is over,” said Jonathan Smoke, chief economist for Cox Automotive Inc., “it’s clearly slowing due to affordability getting worse and forcing production declines to keep supply in balance.”
Car dealers are now reporting that fears about the economy have become the number one factor holding back their business, replacing high interest rates as the main concern. The average cost of a new car has reached $48,799, up 28% from 2019, with prices expected to rise further due to tariffs.
Automakers have pulled various levers to manage tariff costs, including cutting incentive spending and raising prices on select models affected by tariffs. However, experts predict that automakers will pass along 80% of the cost of Trump’s tariffs to consumers, driving up prices by nearly $2,000 per car.
The slowdown in U.S. auto sales has significant implications for the industry, with some predicting production declines and higher prices ahead.
Source: https://www.ttnews.com/articles/party-over-car-sales-tariff