U.S. auto sales get boost as tariff fears spur car buying

ECONOMY

Study: Duties could increase the cost to build by $12,000

A row of 2025 Ridgeline pickups sit on display at a Honda dealership on March 23 in Highlands Ranch, Colo. DAVID ZALUBOWSKI — THE ASSOCIATED PRESS

Recently Imported cars are parked after being unloaded in the Port of Los Angeles in June 2021. CAROLYN COLE — LOS ANGELES TIMES/TNS

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By David Welch, Keith Naughton and Gabrielle Coppola

Bloomberg

Automakers including Honda Motor Co. and Hyundai Motor Co. posted higher first-quarter auto sales in the U.S. as the threat of price hikes from President Donald Trump’s tariffs drove consumers to showrooms.

Ford Motor Co. also saw a gain in retail sales as carmakers reported deliveries for the first three months of the year. Researchers including Edmunds and Cox Automotive had predicted volumes likely got a boost from anxious shoppers trying to get ahead of potential price hikes from the tariffs on imported vehicles, which go into effect this week.

“The prospect of tariffs is already beginning to affect the industry,” Thomas King, president of data and analytics at JD Power, said in a statement. March results were “particularly strong, enabled by consumers accelerating purchases to avoid potential tariff-related price increases.”

Among the first to report results was Hyundai, which saw record sales for the latest month and quarter, buoyed by double-digit gains in demand for its best-selling Tucson small SUV and Elantra compact sedan. For the first three months, Hyundai said Tuesday that it saw a 10% gain in deliveries to 203,554 vehicles, boosted by a 13% jump last month.

Sister brand Kia Corp. similarly posted record sales, with an 11% rise in the January to March period to 198,850 vehicles. Buyers snapped up compact Sportage SUV and new K4 sedan.

Ford saw a 5% quarterly gain in retail sales and 19% jump in March alone. But overall volume slipped 1.3% in the first quarter to 498,480 units, excluding heavy trucks. That was largely due to lower rental fleet sales and the discontinuation of two models, the company said.

Honda reported a 5% gain in first—quarter sales and a 13% jump in March across its namesake brand and Acura luxury vehicle lines. Deliveries of the Japanese carmaker’s top-selling CR-V crossover gained 9% in the quarter and 24% last month.

Other carmakers including General Motors Co. and Toyota Motor Corp. plan to release US sales figures later Tuesday. Tesla Inc. is expected to detail its global delivery numbers for the period on Wednesday.

The quarter could be the last one of relative normalcy before the industry is upended by 25% tariffs on passenger-vehicle imports, which make up about half of the US market. Even cars that aren’t imported typically use a significant amount of non-U.S. parts, some of which may also be subject to levies.

Representatives of several large U.S. automakers have been lobbying the Trump administration to exclude certain low-cost car components from the planned tariffs, Bloomberg News reported Monday.

While it’s not clear how new costs will be distributed between automakers, suppliers and car buyers, prices are expected to rise considerably. A recent study by Anderson Economic Group found that the tariffs could increase the cost to build vehicles by as much as $12,000. That could make some models unviable in the US, particularly at the lower end of the market.

Dealers have seen a surge in demand from would-be buyers worried about prices. Chevrolet dealer Duane Paddock said GM sent an unusually large amount of inventory to meet the buyer interest. A Hyundai sales executive recently sent a memo to retailers suggesting business could set records.

U.S. dealerships are sitting on about 60 to 90 days of inventory on average, providing them with a cushion against the immediate effects of the tariffs.

“It has created an urgency to buy it now before there’s a price increase,” Rhett Ricart, a dealer of Ford, Chevrolet, Hyundai and other brands in Columbus, Ohio, said in an interview.