US car sales are expected to rise about 6% for the third quarter, as Americans continue to buy cars at a surprisingly strong pace despite tariffs and other uncertainties.
Several of the largest carmakers on Wednesday reported healthy US sales gains for the July to September period. General Motors and Ford each said vehicle sales rose 8%, and Toyota Motor’s North American unit reported a 14% increase.
Market research firm Cox Automotive expects US new vehicle sales to be about 4.14-million units for July-September, compared with 3.9-million in the same period last year.
President Donald Trump’s One Big Beautiful Bill ended the $7,500 tax credits for new EV purchases on Tuesday, leading to a temporary surge in sales during the quarter.
Trumps tariffs have also trickled down to affect the industry with higher prices on parts and other components. Still, carmakers have not substantially passed on those costs in the form of higher prices, and demand for new vehicles has so far held steady.
Duncan Aldred, president of GM’s North American business, said consumers seemed less concerned about tariffs and potential price hikes than they were a few months ago.
“I think stability, clarity, and the lack of that massive price rise that people feared is really driving the market,” he said on Wednesday.
Hyundai Motor North America CEO Randy Parker said he expected the industry’s strong sales to continue through the end of the year, citing interest-rate cuts from the Federal Reserve.
“We’re going to close the year out with a bang,” Parker said.
Demand for mid-size crossovers and pickup trucks remained strong in September, Cox said in a report.
However, new vehicle sales were expected to wane in the coming months, as companies passed on their increased costs, Cox analyst Charlie Chesbrough said in the report.
“More tariffed products are replacing existing inventory, and prices are expected to be pushed higher as automakers pass along higher import costs,” Chesbrough said.
GM is expected to hold on to its top spot during the quarter, followed by Toyota and Ford, according to Cox. Tesla’s sales are expected to drop by nearly 6%.
The Japanese carmaker has not shifted its production because of Trump’s levies, and in August said it faced a $9.5bn hit from tariffs. Still, the Toyota brand’s head of sales, Damon Rose, left the door open for price increases.
“We do think there’ll be some industry price increases. We’ve been monitoring and tracking that,” Rose said. “But from a Toyota perspective, we’re going to be followers to that, not first movers.”
The average retail price for new vehicles in September was expected to touch $45,795, up $1,310 from last year, market data provider JD Power had said last month.
In July and August, average hikes from a year ago were $938 and $985, respectively.
S&P Global Mobility expects car demand to taper off towards the end of the year, hurt by affordability concerns, lower EV sales volumes and expected economic slowdown over the next few quarters.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.