General Motors (GM) and Ford, two of Detroit’s automotive giants, both reported a notable increase in their U.S. car sales for the second quarter on Tuesday.
This rise is partly attributed to consumers expediting purchases in anticipation of new U.S. tariffs.
GM saw a 7.3 per cent rise in vehicle deliveries, reaching 746,588 units. This growth was driven by strong demand for pickup trucks and SUVs, alongside positive sales of more affordable models.
Ford experienced an even larger jump, with a 14.2 per cent increase in sales, totalling 612,095 vehicles. Ford’s boost was significantly helped by a popular programme that offered customers employee pricing on many of its models.
Despite the auto industry being a key focus of President Donald Trump’s trade policies, consumers haven’t yet seen major price hikes due to tariffs.
Automakers have been using existing inventories and have, so far, avoided substantial price increases.
Both companies’ sales exceeded analyst projections from Edmunds.com, leading to a rise in their stock prices on Tuesday.
Auto analysts noted a surge in consumer visits to U.S. dealerships in March and April, as buyers aimed to purchase vehicles before Trump’s tariffs on imported finished cars, which 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, though the White House granted a two-year grace period and clarified that automakers wouldn’t face double tariffs due to existing levies on steel and aluminium.
While retail car prices haven’t significantly increased, analysts at Cox Automotive recently pointed to a reduction in dealer incentives, suggesting a tightening market.
Jonathan Smoke, Chief Economist at Cox Automotive, has projected an eight per cent price increase due to tariffs.
He stated last week that “we don’t think consumers or fleet buyers are able and willing to accept that added cost,” suggesting that production adjustments and lower inventory levels are likely.
Near midday Tuesday, GM’s shares climbed 5.2 per cent, while Ford’s jumped 3.1 per cent.
