New light-vehicle sales surpassed a 17 million-unit seasonally adjusted annual rate (SAAR) for the second consecutive month according to NADA and Ward’s Intelligence. This reflects a 7.7 percent increase year over year as the threat of tariffs continues to control customer demand.
The surge in new vehicle sales can be attributed to a combination of factors but is primarily thanks to the influence tariffs have had on consumers. In April, buyers moved up their planned purchases as they rushed to get ahead of impending tariffs. This pre-emptive purchasing behavior bolstered the SAAR to 17.3 million units, well above 2024’s mark.
According to Ward’s Intelligence, the SAAR for March and April would been closer to 16 million units without tariffs driving consumers to dealerships. Over the first four months of the year the SAAR sits at 16.7 million units, a 7.1 percent increase over last year.
Inventory Continues to Shrink
April 2025 marked the first decline in new light-vehicle inventory in three years, with available vehicles totaling 2.62 million units, down 4.1 percent year-over-year. A combination of increased sales and some automakers freezing new vehicles shipments has begun to tighten available inventory.
Looking ahead, inventory levels may tighten further in May if the current high sales volume continues. Even if it does not, production continues to slow this year as North American light-vehicle production in April 2025 only reached 3.86 million units, a 5.9 percent decline year over year. This marks the fourth consecutive monthly drop. As automakers continue to contend with shifting tariffs and a changing market, there’s no telling when or if production may rise again. If it continues to drop, it will likely impact how quickly dealerships can replenish their lots.
Market Share Shifts
Total light vehicle SAAR was up in April, but the increases were uneven between different segments. Total car sales were only at 2.9 million, a 4.9 percent decrease year over year. The car sales rate currently sits at 3 million for all of 2025, completely flat compared to last year. This was the only vehicle segment that saw a decline as other groups saw double digit growth.
Total light truck sales sat at 14.4 million, a 10.9 percent increase year over year with sales up 8.9 percent year to date. Domestic light vehicles saw a more modest increase in April, sitting at 13.1 million and up 6.9 percent over 2024. Import light vehicles have seen the largest growth year to date as they sit at 4.04 million, an increase of 13.8 percent. Imports also had a successful April, up 10.4 percent year over year as customers targeted vehicles most likely to be impacted by tariff price increases.
Challenges on the Horizon
Shrinking inventory and steady consumer demand have also led to shifts in pricing strategies. Average incentive spending per unit fell to $2,808 in April according to J.D. Power, reflecting a $260 decrease compared to March. However, these incentives remain slightly higher than the $2,599 average recorded in April 2024. If inventory keeps shrinking though, discounts will likely decrease alongside it.
While March and April 2025 sales have been notably strong, this pace may be unsustainable in the months ahead.
“Many buyers who would’ve likely purchased a vehicle later in the year have pulled forward their purchase ahead of tariffs taking effect and it is very likely that we will see vehicle prices rise,” said Patrick Manzi, NADA Chief Economist. “The exact timing of vehicle price increases is tough to pinpoint, but we will likely begin to see the effects by Q3 of this year.”
NADA’s full-year projection for 2025 now stands at 15 to 16 million units, reflecting an adjustment to account for economic uncertainties and a deceleration in buying activity following this early-year surge.
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