General Motors (GM) and Ford, two of Detroit’s automotive giants, have both reported a significant increase in their U.S. car sales for the second quarter of the year. This surge in sales is believed to be driven by consumers rushing to make purchases in anticipation of new U.S. tariffs that could potentially impact prices.
GM recorded a 7.3 per cent increase in vehicle deliveries, reaching a total of 746,588 units. The growth in sales was primarily fueled by strong demand for pickup trucks and SUVs, as well as positive sales of more affordable models. On the other hand, Ford saw an even larger jump in sales, with a 14.2 per cent increase totaling 612,095 vehicles. Ford’s boost was greatly aided by a popular program that offered customers employee pricing on many of its models.
Despite the auto industry being a focal point of President Donald Trump’s trade policies, consumers have not yet experienced significant price hikes due to tariffs. Automakers have managed to utilize existing inventories and have, thus far, avoided imposing substantial price increases on consumers.
Both GM and Ford exceeded analyst projections from Edmunds.com, leading to a rise in their stock prices on Tuesday. Auto analysts have noted a surge in consumer visits to U.S. dealerships in March and April, as buyers rushed to purchase vehicles before Trump’s tariffs on imported finished cars took effect in early April. However, this trend began to decline in May.
Additionally, a 25 per cent tariff on imported auto parts was imposed in early May, but the White House granted a two-year grace period and clarified that automakers would not face double tariffs due to existing levies on steel and aluminum. While retail car prices have not seen significant increases, analysts at Cox Automotive have pointed to a reduction in dealer incentives, indicating a tightening market.
Jonathan Smoke, Chief Economist at Cox Automotive, has projected an eight per cent price increase due to tariffs. He mentioned last week that consumers and fleet buyers may not be willing to accept the added cost, suggesting that production adjustments and lower inventory levels are likely in the future.
As a result of the positive sales reports, GM’s shares climbed 5.2 per cent, while Ford’s shares jumped 3.1 per cent near midday on Tuesday. The automotive industry continues to navigate through the challenges posed by tariffs and trade policies, while striving to meet consumer demands and expectations.
