U.S. Vehicle Sales (July 2025)

U.S. Vehicle Sales Rebounded in July

• U.S. vehicle sales rose by 7.1% month-on-month (m/m) to 16.4 million (annualized) units in July – above market expectations for 16.0 million units.
• Unadjusted sales volumes were 1.37 million units or 6.6% above year-ago levels. The average daily selling rate (DSR) was 52,695 – calculated over 26 days – 2.5% above July 2024's 51,428 daily rate calculated over 25 days.
• Passenger vehicle sales fell 11.5% year-on-year (y/y) while sales of light-trucks rose 7.1% y/y. Light-trucks accounted for 84% of last month's sales, higher than its year-ago 81% share.   

Key Implications

• U.S. vehicle sales started the second half of 2025 on a strong footing, with volumes rising after two months of subdued sales following the tariff driven surge in March and April. Although some stabilization was expected in July, sales came in notably stronger than anticipated last month. One reason for this is that automakers have largely absorbed the impact of tariffs, limiting the passthrough to consumers. However, this trend is expected to recede with the introduction of 2026 models later this year.
• As higher prices are gradually passed on to consumers through the second half of the year, we expect sales to moderate slightly but remain close to 16.0 million units on average. The recent passage of the One Big Beautiful Bill Act is expected to provide some support to sales moving forward through the new provision for the deduction of auto loan interest payments. However, growing headwinds in the broader economy - as evidenced by the recent labor market report which showed job growth slowing to crawl over the past three months – are expected to keep sales constrained through the second half of the year.       

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