The vehicle spending spree kick-started by concerns about the impact of new tariffs on auto prices is coming to an end.
Two recent reports have found North American vehicle markets will decline in the latter half of 2025, following a surge in April and May.
Cox Automotive estimates the seasonally adjusted annual rate of new-vehicle sales in the U.S. fell to 16 million in May, down sharply from 17.3 million in April.
Although total sales volume rose three point two percent year over year to 1.5 million units, the company cautioned that “the year-over-year and month-over-month gains may be slightly overstated, as May 2025 had one more selling day than both May and April 2024.”
Charlie Chesbrough, senior economist at Cox Automotive, said the market’s recent strength stemmed largely from tariff-related buying behaviour.
“The vehicle market has been particularly strong since new tariff announcements in March, as many vehicle shoppers who were considering buying this year decided to pull ahead their purchase before higher prices hit the market,” he said in the company’s May forecast. “With much of that pull-ahead demand now satisfied, we believe the pace of consumer demand will decline in the months ahead.”
DesRosiers Automotive Consultants shows that, in Canada,vehicle sales rose 5.7 percent in May 2025, reaching approximately 169,000 units — but noted signs of slowing momentum.
In a statement to Automotive News Canada, DesRosiers managing partner Andrew King said: “The industry still posted a solid year-over-year gain of five point seven percent, but the seasonally adjusted figures are trending below those seen in January and February — a somewhat concerning trend.”
May marks the 19th consecutive month of year-over-year gains in the Canadian market, but King emphasized the pace of recovery remains uncertain. May’s sales, while well above the approximately 141,000 units recorded in May 2022 during the peak of the semiconductor shortage, still reflect an industry that has not fully returned to pre-pandemic norms.
