Ford Motor, Kia and Hyundai have reported solid US performance in April sales year-over-year as customers were panic-buying due to fears of possible tariff-induced price increases. This comes in the wake of the introduction of tariffs by the Trump administration that have unsettled markets and investors, with customers worried that car makers will pass on the cost tariffs to consumers. Therefore, customers rushed to purchase new vehicles ahead of a potential price increase. The frenzy seems to be waning if not already passed According to CNBC the tariff fear-buying started in late March and was sustained in April, driven by some automakers who offered special discounts or promised not to hike prices in the near term owing the President Trump’s tariff regime. “April results are dominated by the prospect of future vehicle price increases due to tariffs.” Thomas King, president of the data and analytics division at J.D. Power. However, the booming demand may be short-lived. King and Cox Automotive chief economist Jonathan Smoke revealed that the demand slowed in late April as new vehicle inventories tightened with prices rising following the earlier consumer rush. “The economy and auto market are transitioning to a world with higher tariffs on imports,” said Smoke on Tuesday. “The first phase of frenzy in the retail vehicle market seems to have already passed as April is ending with less momentum than it began.” Smoke. Smoke added that the higher costs and lower vehicle inventories are what are likely “sapping momentum and could lead to lower sales in future weeks.” Automakers including Ford enjoyed the consumer rush According to CNBC, automakers cashed in on the consumer rush while it lasted. For instance, Ford recorded a 16% year-over-year jump in April sales, supported by consumer and ongoing “employee pricing” program that the company launched when Trump’s 25% auto tariffs on imported vehicle took effect in early 2000 April. Ford revealed on Wednesday that it was extending that program through the Fourth of July weekend. The company revealed that it sold 208,675 new vehicles in April compared to 179,588 said during the same month last year. Ford’s EV sales, which includes hybrids jumped 8.4% to 28,190. Its total US sales for this year are up 3.2% to 709,966 vehicles sold. Peers, Hyundai, that vowed to maintain the same prices through at least early June, recorded a 19% jump in sales last month of its namesake brand compared to the same period last year. At Kia, which is owned by Hyundai’s parent company although they operate separately in the US, it revealed that its April sales rose by about 14% compared to a year earlier. Largest automaker, General Motors , which reports sales on a quarterly basis confirmed on Thursday that it witnessed a 20% increase in April compared to the same month in 2024. The company has however revealed that the Trump administration’s tariffs on imported cars will this year cost the company between $4 billion and $5 billion. General Motors’ CEO Mary Barra also revealed in interview with CNN that the company has downsized on its earnings guidance as the tariffs will eat into its profitability. Also enjoying the moment, Toyota Motor on Thursday revealed that year-over-year sales jumped 10% in April. The 25% tariff on imported cars into the US took effect on April 3. Although the Trump administration modified some tariffs this week, extra levies of 25% on auto-parts are expected to start by Saturday. Ford CEO Jim Farley said on Wednesday that this week’s changes to the tariffs are helpful, although more actions still need to be taken to assist the sector. The changes include reimbursing automakers for some US parts and reducing the “stacking” of tariffs upon one another for the industry. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
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