U.S. Vehicle Sales (January 2025)

U.S. Vehicle Sales Retreated Moderately to Start 2025

• U.S. vehicle sales fell 7.5% month-on-month (m/m) to 15.6 million (annualized) units in January – below consensus expectations for 16.0 million units.
• Unadjusted sales volumes were 1.11 million units or 3.8% above year-ago levels. The average daily selling rate (DSR) was 44,436, 6.1% above January 2024's 42,821 daily rate – both calculated over 25 days.
• Passenger vehicle sales fell 7.5% year-on-year (y/y) while sales of light-trucks increased by 6.5% y/y. Light-trucks accounted for 83% of last month's sales, slightly higher than its year-ago 81% share.   

Key Implications

• Light vehicle sales moderated to start the new year but remained stable on aggregate. The 7.5% month-on-month decline was in part due to several factors that pushed up sales in December, including uncertainty related to prices from tariff threats and expectations for electric vehicle subsidies to end under the new administration. January was likely influenced in part by similar trends, but severe weather events earlier in the month kept a cap on sales activity overall.
• Auto financing rates also jumped higher into the new year, providing another headwind for sales in January. Expectations for further rate cuts have been notably curtailed as inflation risks have become skewed to the upside amid tariff threats and expansionary fiscal policy proposals. Ultimately, elevated interest rates and uncertainty will likely continue to weigh on sales over the coming months.       

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.