New vehicle availability in the U.S. has dramatically dried up. That’s down from 91 days at the start of March to only 70 days as of this month, based on an analysis of data from Cox Automotive. This decline is one of the biggest declines seen in the last few years, sending alarm bells ringing among industry professionals and consumers. On-demand vehicle availability has changed dramatically. This quickly implemented change is in addition to the new 25% tariff on imported vehicles that started on April 3.
Cox Automotive’s chief economist, Jonathan Smoke, explains that this drop in supply is driven by consumer behavior motivated by the upcoming tariffs. He pointed out that consumers are trying to pre-purchase vehicles before tariffs raise the prices. Leading automakers and suppliers are already learning to thrive in this new, greener economic reality. Though they will absorb a portion of these cost increases, they are sure to pass most of this burden onto American consumers.
In light of the ongoing tariff crisis, many automakers have changed their plans for imports. While some companies have decided to keep vehicles in port, others—such as Jaguar Land Rover—have stopped all imports entirely. General Motors has announced plans to rapidly expand production capacity here in the U.S. They have increased capacity at an Indiana pickup truck plant. In order to address growing consumer needs, the company has made a strategic pivot. As part of this shift, they have committed to eliminating previously scheduled shutdown existence at their Campus in Tennessee.
Ford Motor Company is innovative in its responsiveness to influencing market dynamics. They are trying to offer consumer “employee pricing” deals to unload some of that inventory and cover their own costs climbing. Stellantis has seized the moment to do extensive sell down of inventories by doing like tactics and using the same pricing approaches. These tactics are a clear sign of how desperate manufacturers are to artificially boost their sales momentum in an exceedingly competitive environment.
Put simply, new vehicle sales are booming! Retreating slightly from last week, but still resting 22% above last year’s seasonally adjusted pace, and over an impressive over 8% increase in year-to-date volume. Surprisingly, even with this good news on the sales front, many dealership managers are seeing a major change in who their customers are. Nick Anderson, the general manager of a Ford dealership in Missouri, saw the writing on the wall. As he put it, “All of our buyers are more sensitive to price. We are still selling a lot of cars and trucks. We’re getting killed on margin. It’s just a different type of clientele.” He remains optimistic about performance, adding, “We’re pacing to match or beat last year.”
Industry responses to these market changes provide insight into how industry operators are viewing the state of play today. Ryan Rohrman, CEO of Indiana-based Rohrman Automotive Group, expressed a positive outlook on business, asserting that “business right now is actually pretty strong.” His remarks to Automotive News point to the unexpected “silver lining” that some dealerships are finding—given the headwinds facing the industry from the supply drop and upcoming tariffs.
Beyond new vehicle availability, used vehicle supply has decreased significantly. The days’ supply of used vehicles dropped by four days to 39 days per Cox Automotive. This decrease is similar to trends in the new vehicle market and is part of a larger movement in consumer purchasing habits.
Consumers are learning to live with a rapidly evolving automotive landscape full of tariffs and shifting supply. At the same time, industry stakeholders are beating backs to fill that demand while coping with skyrocketing costs.