As the auto industry gears up for President Donald Trump’s tariffs on Canada and Mexico to go into effect March 4, news of an unexpected February sales gave a boost to dealerships across the U.S.
Cox Automotive is forecasting a modest rebound when February’s new-vehicle sales are reported after a slower-than-expected January. February’s seasonally adjusted annual rate (SAAR), or sales pace, is expected to improve by 11.3 percent to 16.3 million, up from January’s 15.6 million pace and an increase from last year’s 15.7 million level.
If attained, February would be the sixth consecutive month with a year-over-year sales pace increase.
Stronger February
While new-vehicle sales volume is expected to decline just slightly from last year, Cox analysts noted February 2025 has a stronger sales pace when adjusted due to it having has one fewer selling day than February 2024.
Charlie Chesbrough, senior economist at Cox Automotive, noted new-vehicle sales have remained relatively strong since the election, finishing 2024 at the highest pace recorded since spring 2021. But there was a slew of contributing factors that lead to the drop off in the first month of 2025.
“January sales dropped off from December, however, as cold weather across much of the country likely caused some buyers to delay their purchase,” said Chesbrough in a statement released with the forecast. “In addition, California fires and the inauguration in January may have also kept some shoppers at home. Many of those buyers are likely to return this month, which will help lift the February sales pace.”
Segment Breakdown
By segment, sales increased month over month by double digits in four of the six sectors—with the other two above nine percent. Mid-size SUV/crossover had the largest gain by percentage at 12.9 percent at 185,000 expected to be sold.
Compact SUV/crossover had the largest by volume with 230,000, rising 10.9 percent from January for a market share of 18.4 percent. Compact cars rose by 12.0 percent (95,000) and other segments at 11.3 percent (520,000) finished out the sectors expected to report double digit growth. Full-size pickup trucks are forecasted at 165,000 in new-sales and mid-size at 55,000, up 9.9 and 9.5 percent respectively.
Trump Concerns
Overall, Cox Automotive forecast continues to expect new-vehicle sales to improve modestly in 2025, rising 300,000 to reach 16.3 million by year’s end. Chesbrough hypothesizes that positive economic growth coupled with improved buying conditions should lead to the near two percent gain.
But that projection comes with it a warning of uncertainty due to the policies being dictated from the Oval Office.
“Though we are still optimistic about market growth in 2025, policy changes regarding tariffs and battery electric vehicle credits by the new Trump Administration could have significant negative effects on the current outlook,” Chesbrough noted.
