J.D Power is forecasting a nearly 10 percent increase in total new-vehicle sales for March from a year ago as concerns mount on what tariffs will do to the automotive industry in the U.S.
Total new-vehicle sales for March 2025, including retail and non-retail transactions, are projected to reach 1.5 million, a 9.6 percent increase from March 2024 according to a joint forecast from J.D. Power and GlobalData.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.8 million units, up 1.2 million units from March 2024. New-vehicle total sales for the first three months of 2025 are projected to reach 3.9 million units, a 5.3 replace increase from the same time last year when adjusted for selling days.
The Retail Sales Forecast
New-vehicle retail sales for March 2025 are expected to increase from a year ago to 1.3 million, a 13.0 percent increase from March 2024. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 8.9 percent from 2024. New-vehicle retail sales for Q1 2025 are projected to reach 3.2 million units, an 8.4 percent increase from Q1 2024 when adjusted for selling days.
“March results reflect a continuation of recent trends, with robust consumer demand for new vehicles delivering a sixth consecutive month of retail sales growth,” said Thomas King, president of the data and analytics division at J.D. Power in a statement released with the report. “The 13.0 percent year-over-year retail sales increase is particularly strong, enabled by consumers accelerating purchases to avoid potential tariff-related price increases.”
Tariff Shadow
The forecast comes as President Donald Trump signed an executive order that goes into effect April 2 imposing a 25 percent tariff on cars built outside of the U.S. In signing the order in the Oval Office on cars and light trucks, Trump stated the tariffs would be “permanent” and nothing that would prompt the removal of the import taxes.
King noted the uncertainty of the tariffs had already affected the industry.
”In addition to the boost in March sales, anticipated increases in manufacturer and dealer discounts have not materialized, even as inventory on dealer lots rises,” said King. “Although the magnitude of these effects is currently modest, they do present a preview of potential disruption as manufacturers, dealers and consumers prepare for uncertainty in the coming weeks and months.”
Among the key finding from the report were:
- The average new-vehicle retail transaction price in March is expected to reach $44,849, up $637 from March 2024. The highest for any month—$47,329—was set in December 2022.
- Average incentive spending per unit on trucks/SUVs in March is expected to be $3,174, up $197 from a year ago, while the average spending on cars is expected to be $2,515, up $286 from a year ago.
- Trucks/SUVs are on pace to account for 81.3 percent of new-vehicle retail sales.
Affordability Issues
The tariffs and the costs expected to be passed along to car buyers comes as vehicle affordability continues to remain a key challenge for the industry. Despite improvements, the sales pace has yet to return to pre-pandemic levels.
Average monthly finance payments in March are on track to reach $731, an increase of $12 from March 2024, and the highest on record for the month of March. Payments are getting no help from interest rates for new-vehicle loans, which are expected to remain flat year over year at 6.82 replace.
With monthly payments at record highs, and tariff-related price increases on the horizon, affordability is likely to become an even greater focus in the coming months, according to JD Power analysts. “As the first quarter of 2025 comes to an end, the U.S. auto industry is generally performing as expected,” stated King. “There is a continuation of well-established trends that point to gradual increases in the sales pace at the expense of gradually larger discounts and reduced profitability.
