US Auto Dealers See Surge in Sales as Tariff Anxiety Grows
The US automotive industry is experiencing a sales boost as consumers rush to purchase vehicles ahead of potential tariff increases. According to Cox Automotive Chief Economist Jonathan Smoke, “Dealers have a front-line view of the U.S. auto market, which appears to be at an inflection point.” The recent sales pace has lifted market sentiment for franchised dealers, but 2025 is expected to be a challenging year for the industry.
The customer traffic index rose to 37 from 33 in Q1 last year, with franchised dealers reporting a 10-point increase in in-person visits. Profitability also increased, jumping to 39 on the index, the highest in over a year. One Mazda dealer noted, “People are buying cars because they think tariffs are coming.”
Impact of UK Trade Deal on Car Imports
Meanwhile, a trade deal between the US and the UK has reduced tariffs on UK auto imports from 25% to 10% on up to 100,000 vehicles. However, this deal may have mixed effects on the US market. Jaguar Land Rover (JLR), a UK-based subsidiary of India’s Tata Motors, has lowered its fiscal 2026 EBITDA growth estimate due to the continued impact of tariffs.
JLR sells about a quarter of its vehicles in the US market and now plans to reallocate its available units to “accessible markets” to maximize profits. This could potentially lead to fewer options for US consumers on dealer lots. The UK exported about 102,000 vehicles to the US in 2024, with an average shipping cost of £1,205 ($1,597) per car.
Conclusion
The US automotive market is navigating complex trade dynamics, with both positive and negative impacts on sales and availability. While dealers are currently benefiting from tariff anxiety-driven sales, the long-term effects of trade agreements and tariffs remain to be seen.
