Record Sales for Major Automakers

In the first quarter of 2025, major automakers including General Motors (GM) reported significant increases in U.S. vehicle sales as they prepared for impending tariffs announced by President Donald Trump. GM recorded a notable increase of 16.7% in new vehicle sales, driven primarily by a rise in all-electric models like the Cadillac Escalade IQ and Cadillac Optiq, along with solid performances in entry-level crossovers and full-size SUVs.

Industry Performance Overview

Auto industry analysts had projected modest growth of approximately 1% year-over-year for the quarter, but the actual performance surpassed these expectations. South Korean manufacturers Hyundai Motor and Kia Motors reported increases of roughly 10% and 11%, respectively. Other brands also showed growth: Nissan recorded a 5.7% rise, Honda Motor a 5.3% increase, and Toyota Motor saw a slight gain of about 1% during the same period.

However, Ford Motor Company was an exception, experiencing a 1.3% decline in sales, partially attributed to the discontinuation of the Ford Edge SUV in 2024.

Upcoming Tariffs and Consumer Behavior

The reported sales results come as the auto industry braces for tariffs that include a 25% levy on imported vehicles, set to take effect shortly. These tariffs have prompted consumers to rush to dealerships to avoid potential price increases on new vehicles.

J.D. Power indicated that March marked a particularly strong month for retail sales, which surged by 13% year-over-year as buyers moved quickly to secure purchases. Thomas King, president of the data and analytics division at J.D. Power, noted, “While the tariff situation remains both fluid and uncertain, the prospect of tariffs is already beginning to affect the industry.” Many dealerships reported increased traffic as consumers anticipated the tariffs would drive up prices.

Executives’ Insights on Sales Trends

Hyundai’s North America CEO, Randy Parker, noted an upturn in dealership traffic, stating, “The last week… was by far the best weekend that I’ve seen in a very long time,” attributed to consumer anxiety regarding the impending tariffs. Similarly, Ford witnessed a 5% increase in retail sales year-over-year, bolstered by a 19% jump in sales for March.

Future Sales Projections

The anticipated tariffs have raised concerns about future vehicle prices, which are already averaging around $48,000, according to Cox Automotive. Automakers like Hyundai are currently evaluating whether to increase vehicle prices due to the tariffs, but as of now, Parker emphasized that “right now is a great time to buy a car, because as of today, we haven’t raised prices.”

Looking ahead, S&P Global Mobility forecasts that U.S. light-vehicle sales could decline to between 14.5 million and 15 million units annually if tariffs remain in place, a step back from approximately 16 million vehicles sold in 2024.