Cox Automotive reports that new vehicle shoppers were active early in April, likely driven by concerns about tariffs and future price increases. The April seasonally adjusted annual rate (SAAR) is forecasted to reach 16.4 million, surpassing last April's 16 million and marking the best April since 2021. However, this pace is lower than March's 17.8 million. New vehicle sales volume is expected to rise by 4.6% year-over-year but decline by 12% from March.

Charlie Chesbrough, Cox Automotive senior economist, noted that the market is influenced by headlines from the White House. Concerns about potential tariffs led to a sales surge in March, and April began strongly. However, declining inventory levels have likely pushed vehicle prices higher, potentially weakening sales later in April. Rising economic concerns and declining consumer confidence add to the uncertainty.

New-vehicle inventory in the U.S. decreased from nearly 3 million units in early March to 2.7 million by the start of April, with days’ supply dropping from 89 to 70. Inventory continued to decrease in early April, with days’ supply falling to around 60 mid-month. New tariffs on assembled vehicles and some automotive parts are anticipated to disrupt supply chains and increase repair costs, although the impact is expected to be felt in mid- to late summer.

A 25% tariff on assembled vehicles imported into the U.S. took effect on April 3, and a similar tariff on select parts is scheduled for May 3. Trade groups have requested more time to adjust supply chains due to these tariffs. Research estimates that a uniform 25% tariff on all trading partners will affect over 17 million vehicles, including 6.8 million from the Detroit 3 (General Motors, Ford, and Stellantis).

In related news, General Motors (GM) reported earnings of $2.78 billion, or $3.35 per share, for the quarter ending March 31, compared to $2.98 billion, or $2.56 per share, a year earlier. Excluding one-time items, GM earned $2.78 per share, exceeding Wall Street expectations. Revenue increased to $44.02 billion from $43.01 billion. GM is reassessing its 2025 expectations due to auto tariffs and is delaying its conference call to evaluate potential tariff changes.

The Wall Street Journal reported that President Trump may reduce automotive tariffs, potentially halting duties on foreign-made cars and easing levies on foreign parts used in U.S. car production. GM's stock declined before the market opened following this news.