Automakers See Significant April Sales Increases Amid Tariff Fears, But Experts Warn of Slowdown

Automakers including Ford, Hyundai, and Kia reported strong year-over-year sales increases for April, fueled by a surge in consumer demand as buyers rushed to purchase new vehicles in anticipation of price hikes due to President Donald Trump’s auto tariffs.

The tariff-driven buying frenzy began in late March and continued into April, with several automakers offering special discounts and assurances that prices would remain stable for a limited time. However, the initial rush appears to have tapered off as the month progressed.

“April results are dominated by the prospect of future vehicle price increases due to tariffs,” said Thomas King, president of the data and analytics division at J.D. Power.

Tariff-Fueled Surge Slows as Prices Rise

Ford led the charge with a 16% year-over-year increase in April sales, bolstered by consumer demand and an ongoing “employee pricing” program launched in response to the 25% auto tariffs that took effect in early April. Ford plans to extend the pricing program through the July 4 weekend to maintain momentum.

Hyundai also saw a significant boost, reporting a 19% increase in sales compared to April 2024, as the company pledged not to raise prices on vehicles through at least early June. Kia, operating separately in the U.S. under Hyundai's parent company, reported a 14% increase in sales during the same period.

General Motors, which reports U.S. auto sales quarterly, had its best April since 2007, according to CEO Mary Barra. Despite these gains, experts caution that the surge in sales may not be sustainable as the effects of higher tariffs and tightening inventories take hold.

Experts Warn of Slower Sales Ahead

Industry economists, including Cox Automotive’s chief economist Jonathan Smoke, noted that the strong sales momentum is beginning to slow. As the month ended, vehicle inventories tightened, and prices began to rise, signaling that the initial rush of tariff fear-buying may have reached its peak.

“The economy and auto market are transitioning to a world with higher tariffs on imports,” Smoke said. “The first phase of frenzy in the retail vehicle market seems to have already passed as April is ending with less momentum than it began.”

King and Smoke both highlighted that higher vehicle costs and reduced inventories could lead to slower sales in the weeks ahead, potentially dampening the positive sales figures seen earlier in the month.

Impact of Tariffs on the Auto Industry

Trump's 25% tariffs on imported vehicles officially took effect on April 3, with additional tariffs on auto parts set to begin by the end of this week. While recent changes to the tariffs — including reimbursements for U.S. parts and reductions in the "stacking" of tariffs — may offer some relief to automakers, experts warn that the higher costs may ultimately lead to reduced consumer demand and lower sales in the coming months.

Ford CEO Jim Farley acknowledged that while recent changes to the tariffs are helpful, more support is needed for U.S. automakers to thrive in the current environment. As the auto industry navigates the evolving tariff landscape, the long-term effects on sales remain uncertain.