On Tuesday, Ford Motor announced a modest decline in its first-quarter U.S. vehicle sales, coinciding with growing concerns over the effects of President Donald Trump's auto tariffs, which are set to take effect this week. The automaker's first-quarter sales fell by 1.3% compared to the same period last year. This decrease was primarily attributed to the discontinuation of the Ford Edge SUV in the previous year, an action that was not related to the impending tariffs.
Sales of the Ford Edge SUV plummeted by 94% as the company’s dealers worked to deplete the remaining inventory. Despite the overall sales decline, Ford reported a positive trend in its retail sales. Excluding fleet business, retail sales increased by 5% year-over-year, driven by a significant 19% surge in March.
The sales figures come just days before the implementation of tariffs ordered by Trump, which include a 25% levy on imported vehicles starting Thursday. The auto industry is also anticipating announcements regarding potential additional reciprocal tariffs that could further impact automakers on Wednesday.
In a recent forecast, J.D. Power predicted strong industry sales for March as consumers rushed to dealerships to purchase new vehicles in an effort to avoid potential price increases due to the tariffs. The robust 13% year-over-year increase in retail sales was particularly noteworthy, with consumers accelerating their purchases to sidestep any future tariff-related price hikes. Thomas King, president of the data and analytics division at J.D. Power, emphasized the significance of this trend in a recent release.
While the situation surrounding tariffs remains fluid and uncertain, their looming presence is already starting to impact the automotive sector. Industry analysts expect that first-quarter vehicle sales overall may grow by 1% or less year-over-year due to rising prices and a decrease in sales incentives offered by automakers and dealers.
As the automotive landscape continues to evolve in response to these economic pressures, Ford and other automakers are preparing for a challenging market environment. The combination of tariffs and shifting consumer behavior will likely play a crucial role in shaping the future of vehicle sales in the United States.
