U.S. Auto Industry Faces Tariff Challenges as Q1 Sales Rise 0.6%

President Trump's 25% tariffs on imported vehicles and parts, effective April 2, 2025, are expected to strain affordability and disrupt the market following a modest first-quarter sales increase.

• U.S. auto sales grew by 0.6% in Q1 2025, reaching 3.79 million units, driven by pre-tariff consumer purchases.
• Ford reported a 1.3% decline in overall Q1 sales but saw a 5% increase in retail sales, including a 19% surge in March.
• President Trump's 25% tariffs on imported vehicles and parts, starting April 2, are expected to increase prices and limit discounts.
• Analysts predict the tariffs will reduce the availability of lower-cost imported vehicles, potentially pushing average new-vehicle prices closer to $50,000.
• The industry anticipates challenges in upcoming quarters, with rising costs and inflationary pressures likely to dampen sales and affordability.

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