The looming threat of tariffs on imported vehicles triggered a buying frenzy among consumers in April, resulting in a significant surge in car sales across various automakers. According to data reported by Automotive News, the spike in sales was widespread, with several major manufacturers seeing substantial year-over-year increases.
Toyota led the charge with an 8% increase in sales, while Ford saw a 15% jump and Honda experienced a 17% rise. Hyundai’s sales were up nearly 19%, and Mazda recorded a 21% increase. Luxury brands also benefited, with Lincoln seeing a 40% surge, Acura up 33%, and Lexus rising nearly 24%. Even Volvo managed a 5% increase in sales.
The phenomenon was described by Cox Automotive’s chief economist Jonathan Smoke as a ‘bank run’ on car dealerships, driven by consumers’ fear of impending price increases due to tariffs. ‘It’s led to a surge in sales as consumers rush to buy before vehicles are completely impacted by the tariffs that have already been announced and gone into play,’ Smoke explained during an online Automotive Press Association presentation.
Sales Patterns and Inventory Challenges
The sales boost wasn’t uniform across all manufacturers. Subaru, for instance, saw only a marginal 0.3% increase in sales, making it a notable outlier among mainstream automakers. The surge in sales began in late March when the tariffs were first announced and peaked in early April before tapering off later in the month.
Industry experts warn that this sales spike may not be sustainable. According to Smoke, the market has ‘hit a ceiling’ due to tight supply and higher prices. Toyota’s North American boss Dave Christ noted that the initial frenzy in early April ‘slowed to a more normal pace’ later in the month, suggesting that the industry may have simply pulled forward existing demand.
Looking Ahead to Potential Price Increases
While some automakers like Hyundai, Mini, and Volkswagen have offered price guarantees through May to provide buyers with more certainty, inventory levels remain a significant concern. Toyota’s Christ mentioned that the company’s limited inventory – starting April with an 11.8-day supply and ending with 11.4 days – constrained their sales potential. ‘If we had more [vehicles] on the ground, I think we would have sold a little more,’ he said.
Subaru faced similar inventory challenges, with their head of sales Troy Poston noting that low inventory levels – below 30 days’ supply for some key models – limited their sales performance in April. Looking ahead, Smoke warns that inventory levels could soon plummet to levels seen during the COVID-19 pandemic, with prices continuing to rise. ‘We could easily get back to 2022 levels of days’ supply very soon — and by soon, I mean within the next three to four weeks,’ he cautioned.
