Overview

• The U.S. government implemented a 25% tariff on imported vehicles on April 3, leading to a surge in new car sales and reduced dealer inventories.
• New vehicle sales rose 17.2% in March as consumers rushed to buy before price increases, with dealer inventory dropping from 91 to 70 days' worth by the end of the month.
• Manufacturers and dealers are employing strategies like pre-tariff sales, cost absorption, and stockpiling to mitigate the impact of the tariffs on consumers.
• President Trump has suggested a possible pause on the tariffs, adding uncertainty as manufacturers prepare for a 25% tariff on imported auto parts set to take effect on May 3.
• The secondary market is seeing increased activity, with used car sales up 12.2% year-over-year in Q1 2025 as buyers seek alternatives to rising new car prices.