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U.S. Vehicle Sales (March 2025)

Andrew Foran, Economist | 416-350-8927

Date Published: April 2, 2025

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U.S. Vehicle Sales Surged in March on Tariff Threats

  • U.S. vehicle sales rose 11.0% month-on-month (m/m) to 17.8 million (annualized) units in March – significantly outpacing consensus expectations for 16.2 million units.
  • Unadjusted sales volumes were 1.59 million units or 10.7% above year-ago levels. The average daily selling rate (DSR) was 60,977 – calculated over 26 days – 15.0% above March 2024's 53,042 daily rate calculated over 27 days.
  • Passenger vehicle sales rose 2.9% year-on-year (y/y) while sales of light-trucks increased by 12.6% y/y. Light-trucks accounted for 82% of last month's sales, higher than its year-ago 80% share.   

Key Implications

  • You could be forgiven for thinking that the blockbuster reading for vehicle sales in March was a late April Fools' joke. The last time sales were this high, interest rates were at very low levels back in early 2021. Current financing rates are more than 3 percentage-points higher than they were back then, but buyers were apparently more concerned with the potential impact of tariffs on vehicle prices over the coming months.
  • Buyer concerns proved to be validated last week when the administration announced that it would be placing 25% tariffs on imported automobiles, with automobile parts to be included in the coming months. Combined with the President's insistence that these tariffs will be permanent, we estimate that the average vehicle price in the U.S. could rise by roughly $5,000, with additional upward pressure likely from the eventual inclusion of auto parts and the steel and aluminum tariffs already in effect (see here). We expect this to weigh on sales materially over the coming quarters, but the President's reciprocal tariff announcement scheduled for this afternoon may have further implications for the automotive industry.       

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