Hyundai and Kia are the first to report their quarterly sales in the United States, and — shocker — people suddenly got very interested in buying cars in the last few weeks of the quarter. A kind of clever thing to do if you were the President would be to get everyone worked up about tariffs, get a strong quarter of sales, and then say “never mind.” That’s probably not going to happen.
Today we celebrate three years of making this website, and I know that many of you come to The Autopian specifically to get away from the concerning news of the world. Trying not to write about the tariffs or their impacts is mostly impossible, so for today’s Morning Dump I’m going to focus less on the politics of it and more on the practical considerations of it all.
For automakers, in the very short-term, it’s probably going to mean more sales. After that, it’s anyone’s guess, but automakers are worried about it enough that they’re engaging in all sorts of interesting behavior. There’s the bargaining phase, which is where most automakers are. And there’s acceptance, which means trying to import all the cars you can while you can.
Finally, for all the talk about Tesla’s share price, one of its newest competitors in China is seeing a huge dip over safety concerns.
Hyundai And Kia Cash In This March As People May Be Trying To ‘Lock In The Price’
Last night the mighty Longhorns vanquished TCU to enter the college basketball Final Four as March Madness spills over into April. The same madness seems to be infecting car buyers, at least at Hyundai and Kia dealerships. Hyundai had its best-ever quarter, with 203,554 sales, up 10% year-over-year.
More impressive for Hyundai, the company’s March sales hit 87,019, up 13% year-over-year. That March number is the second-best month in the company’s history. Hybrid sales led the charge, up 68% year-over-year, with only one EV (the Ioniq 5) in the black this year, though up strongly at 26%. The biggest drops were for the Kona, which has an EV version, and the Santa Cruz, which is great but expensive.
Kia’s total sales were not far off at 198,850 units, a 10.7% quarter-over-quarter increase. The company’s March was also the biggest March on record, likely led by hybrids, and positive momentum for the Telluride and Carnival. The EV6 and EV9 were both down year-over-year.
What does this mean? Hyundai and Kia both build a bunch of extremely competitive products. The company has gotten a bunch of good press for expanding in the United States, even if most of those plans existed before the tariffs were announced.
Some of this, though, is probably a tariff effect, as Automotive News reports:
“The final week of March was the strongest retail sales week we’ve seen of the year,” said Eric Watson, vice president of sales operations at Kia America. “Part of it may have been driven by customers trying to lock in the price of a vehicle they want to purchase.”
Watson said showroom activity was also strong across the industry in the closing days of March.
Definitely lock in the price while you can. I don’t know what is going to happen, but I know that prices now are probably decent. I will continue to tap the “buy your next car before the trade war starts” sign until my finger falls off. Because I bought a car last year (from Galpin Honda, which is owned and operated by Autopian co-founder Beau Boeckmann), I got this email that was sent out to all customers that I thought was interesting:
With the recent announcement of the upcoming 25% tariffs for vehicles and parts built outside of the United States, one thing is certain, our current inventory of nearly 3000 new vehicles is unaffected and tariff-free! The silver lining is that your trade-in is potentially worth significantly more today. Rest assured, Galpin is here offering you the great Galpin deals as we have for over 75 years.
If you have been thinking about a new vehicle, now or in the future, now may be the time. Even if you haven’t been thinking about one, it might make sense for you to act sooner than later. It’s possible that if the tariffs go into effect April 3rd, prices could very well go up from the manufacturers, and in some cases, significantly.
It is also important to point out that since the 25% tariffs applies to parts and components, every vehicle will be affected, even those built in America, as every vehicle has parts and components that are imported.
It’ll be interesting to see how much of a car-rush, if any, we see in the coming weeks at dealerships around the country.
Automakers Are Asking For A Break, Telling Employees It’ll Be Fine
I have not talked to a single person who thinks that tariffs aren’t going to cause car prices to go up. Maybe you think prices should go up. Maybe you think cars are too cheap, and that the cost of those cheap cars is a loss of American manufacturing. I am open to the argument, which is similar to what the UAW is currently saying.
The auto industry, reportedly, isn’t entirely on board. There’s some reporting out there today that the industry is fervently lobbying to make this not happen this week. Let’s start with Bloomberg, which is out this morning with “US Automakers Make Mad Dash to Push Trump to Temper Tariffs” and these details:
Detroit’s automakers have conceded that they’re willing to pay tariffs on completed cars and large components like engines and transmissions, the people familiar with the matter said. But representatives for the companies have told the administration that levies on parts would drive up costs by billions of dollars, leading to layoffs and profit warnings that would run counter to Trump’s goal of building up the industry, one of the people said.
Representatives for the companies declined to comment. Trump on Monday declined to say whether the administration is considering exempting some car parts from the tariffs. He said he had already given automakers “a break” by pushing off tariffs for a month.
The US companies are seeking exemptions on low-value parts like sheaths of electrical wiring that course through modern cars, which are labor intensive to produce and tend to be made in Mexico and other low-wage countries. They argue that the combined levies would send car prices soaring and depress demand from American consumers, who are already confronting average prices approaching $50,000.
Over at the Detroit Free Press, we have the message that automakers are sending to employees:
Leadership at General Motors and Ford Motor Co. are reassuring employees and investors that the companies are working on how to best navigate the turbulence they foresee coming out of the 25% tariffs President Donald Trump imposed on all imported autos and most auto parts.
The messages to the workforces at both automakers, obtained by the Detroit Free Press, said companies are well-positioned to address the uncertainty around the tariffs, which take effect Thursday. Despite being healthy companies, both automakers will feel impact, the statements said.
For that reason, company leaders are wasting no time in studying the new executive order and advising employees to stay focused on their jobs and be mindful of corporate spending.
The annual holiday parties might be a little more muted this year if this holds.
Mercedes Is Reportedly Stockpiling While They Can
Both Mercedes and BMW keep stockpiles of imported cars in New Jersey, and it seems like those lots are a little fuller than usual. Every time I drive by, there seem to be more new vehicles. This apparently isn’t just my imagination, as Reuters is reporting that Mercedes is stockpiling in advance of tariffs.
Mercedes-Benz is building up inventory levels in the U.S. at the wholesale level and at dealer lots to get ahead of tariffs due to be collected from April 3, executives told analysts on a call, according to notes by analysts.
Asked about pricing, executives said no automaker was operating in a silo, implying it would observe how its competitors responded once tariffs were in place, the note by Bernstein Research said.
Mercedes did not immediately respond to a request for comment. The investor call was held before a closed period on company information before annual results scheduled for April 30.
Hear me out, Mercedes. Let’s make a movie where you give me an Actros hauler full of AMGs and a Project.ONE and I’ve gotta Smokey and the Bandit it across the border by April 3rd.
Xiaomi Faces Its First Crisis
The most interesting automaker in the world right now, besides Škoda, is clearly China’s Xiaomi. The smartphone company managed to skip a bunch of steps to become the most talked-about EV automaker in China, even if it’s not even close to the biggest.
A fatal crash that may have involved people trapped in a car has hit the company’s share price, according to local media. Here’s the take from the South China Morning Post, which notes that the company’s assisted driving system was being used:
Xiaomi said the car was travelling at 116kph on a highway with the driver assistance system in operating mode, adding that the system alerted the driver to take over the vehicle two seconds before it hit a concrete barrier.
While Xiaomi did not mention the number of fatalities involved, the mother of the driver said in a social media post that three people – the driver and two passengers – died in the crash.
Xiaomi, which found success with the SU7, did not say if it would recall the cars or update the self-driving software.
Other reports iindicate the three passengers may have been trapped in the car after the crash, although a lot isn’t known at this point. While there have been other incidents with the SU7, this is the first time I can think of that Xiaomi has faced this kind of serious scrutiny.
What I’m Listening To While Writing TMD
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The Big Question
Are you more or less encouraged to buy a new car right now?
Top photo: Depositphotos.com
You guys had an entire month to build assembly lines and shift your entire supply lines into the US. It’s not Trumps fault you couldn’t or wouldn’t do it. /s
Gonna have to squeeze another year out of the rusty 2010 Mazda5 for my wife. Will need David Copperfield levels of “rust repair” to get it through inspection in May.
One evil question in my head lately: What prevents the automakers from piling the bulk of their tariff costs on replacement parts? Those parts will be tariffed at 25%, but let’s say that they double that in order to lower the price increase on cars. Now the car owner is thinking that it might not be worth $1300 for a new alternator on their current car; maybe they should just trade it in.
Higher replacement parts also total accident-damaged cars out faster, creating a market there….
I hope I’m wrong, but I already bought a lot of the major maintenance parts that I foresee on my vehicles for the next 50,000 miles.
Other than “will it balance out the books” (you’d need to sell a lot of replacement parts to make up a 25% tariff on a $30k car) the issue is probably money now versus money later.
If they cut their margins (which aren’t super high (Denalis and King-Ranches aside)) they eat that on their earning reports now. Sales on 500% marked up headlights don’t come until later and assume that someone would pay it.
I agree, but I was thinking that this could be a way to drive auto sales by making repairs prohibitively expensive. And if they profit from the parts that they do sell, all the better (for them).
While I suspect there will be some spreading around of costs to stay profitable, putting it entirely on replacement parts would put a lot of stress on shops and wrenchers who are less able to soak up the added costs. I’m not in the market for a new car right now, but I do need to fix a few of mine. If I can’t afford the part, then I can’t afford the part and I won’t buy it. That isn’t going to push me into a whole new car because, well, if I can’t afford part of a car, I sure as hell can’t afford the whole thing.
It’d result in lost sales on the parts and maintenance side that wouldn’t be made up for on the new-car side because, well, cars are already frickin’ unaffordable before tariffs come into play. When times are tough, parts and maintenance often help fill in the gaps in revenue as folks try to squeeze every last mile of life out of their existing cars, not the other way around. It’d be the equivalent of shooting themselves in both the wiener and the balls.
Car Shield!
The answer is always Car Shield…
lol I’m not signing up for yet another subscription for a bunch of repairs I’ll probably do myself
The automakers wouldn’t sell most of those parts, once people figured out how badly dealerships (who’d get blamed) ripped them off. Aftermarket parts (sometimes made in the same factory) undercut the automakers anyhow, and wouldn’t goose their prices similarly.
Wondering too if the makers will import a base a f model and pay the tariff on that then upgrade it stateside and sell it. Ford Transit style.
Anticipating this, and from significant long-term prodding from my “Elise,” I ordered a new car before the end of the year to replace my inherited 2010 G37x (awesome car, but 15 years old and no longer the preferred car in the garage). I took delivery a couple of weeks ago and have already put on more than 1,000 miles. I am glad I did this before the year-end, because the offers got significantly worse after the first week in January, largely because it looks like manufacturers were anticipating this chaos.
It’s only going to get worse. Buying last week was probably better than this week, buying this week looks to be better than buying next week – so if you need a car get out there! But boy am I glad I am not buying!
I would love to replace my current DD and I figured I’d probably do so in a year or two. I can’t really afford to accelerate those plans, but it looks increasingly like I won’t be able to afford that move in a year or two as planned due to Dear Leader’s economic policies. So, I’m stuck and I’m very frustrated by that.
Car dealers deserve the pain. They are likely supporter of DT, and if they voted for him, they deserve what they get. Unless you are desperate, F@&% buying a new car. Drive and repair what you have.
Very shortsighted take. It isn’t just dealers who will suffer, it’s the dealership employees, the automaker employees, parts supplier employees, shipping people, etc. etc. etc. and that’s to say nothing of what it will mean to consumers. As always, the people who will get hit hardest are the ones who can afford it the least.
Sorry, but the dealership employees are complicit in this madness. You lie with dogs, you get fleas.
I have more sympathy for those in the manufacturing supply chain, who actually DO something that adds value to the product.
Sadly, it will be the sales force who suffers. But that does not change the calculus. I am not rewarding a dealer with my money just because prices are going up due to presidential politics. DT was clear on his intentions prior to election, and those who voted him in are getting their due . . . at the expense of all of us.
BUT, it is never short-sighted to prioritize my financial stability over a car dealer’s. And sadly, it will be the sales force who suffers
Like you say, “as always”. We know the billionaires won’t be the ones who suffer. The workers are always the ones who do, whether it’s due to this, or venture capitalists, or greedy CEOs only interested in the stock price.
At first I thought you were talking about our father, David Tracy, and was about to get defensive
Funny. DT indeed.
For the present, it may be time to pause the notion of acquiring the car we want, and learning to love the car we have . . . . Vote with your dollars, learn to do repairs. Perhaps The Autopian should lead the way in minimize new car reviews, and instead help us all support each other with keeping our collective old cars in good shape. Good luck everyone.
Damn, he just got married a couple months ago and he’s already got kids of posting age. That guy moves fast.
When the felon won in November, I wasn’t sure what was gonna happen to car prices, but I knew it couldn’t be good. So in December, I paid what felt like a lot of money for an 8-year-old compact crossover with 44k grandma miles on it. In the ensuing 3 months, the prices of comps haven’t moved much, but I think they’re about to, so I’ll feel like the smartest person in the room. I don’t drive much anymore, so I’m hoping to keep this one for 10 years and 80k more miles.
Yah. If my ’15 Soul lasts another 10 years, it’ll be to the time when they won’t let me drive anyhow.
Car makers aren’t going to decrease their sales numbers because of the tariffs. They’ll adjust and make sure their numbers are the same. Be it selling better cars at the out the door price than the others (could be good for everyone) or using some Ford Transit tariff maneuvers to help keep their prices down. It could be good for all of us. If the makers then move production here and sell vehicles cheaper to us – its a win win for everyone. I can hope…
I’ll just say, I’m an engineer in an auto-adjacent company making near six figures. I’m not feeling financially confident to put money into a car right now. I’d love to get a new vehicle, but realistically speaking, the depreciation costs and total cost of ownership of new vehicles is unacceptable. I’d rather drive my PHEV till the battery dies or the body rusts, then I’ll get a used EV and drive that into the ground.
My heart wants me to get a Crown Signia though…
With that said, the tariffs on new vehicles are going to be impacting people who have the money to buy/lease them, or people just bad with money. Everyone else is going to be struggling with a hot used car market. Is this the rich tax we’ve been asking for?
I hear you – I have no faith that any of my paying jobs are going to be around much longer. But I have felt this way for the last decade, and I came out all right so far. But definitely going to watch the spending more closely this year (except for the new induction stove, the vacation planned last Fall, oh gosh does it ever end??…)
Car makers aren’t going to accept less sales because of the tariffs. Maybe they’ll be encouraged to undersell domestics again by making more value centric vehicles. This is good for anyone who is smart with their money. Car makers aren’t all going to sell $50k plus vehicles and say ‘oh well’ as their sales numbers fall.
Two seconds?!?!?!
George Carlin used to say that we all get an audible, 2-minute warning when we’re about to die. “Two minutes, get your shit together”.
Two seconds might be more than enough time for a gamer to spot an enemy and sword-slay it with a quick combination of button pushes. But the gamer is focused intently on the screen, because that’s how video games work.
For some dufus who relies on FSD or whatever, and is looking at their phone, two seconds is nothing. A crash is gonna happen.
Everyone who isn’t financially invested is driver assist systems or has more than two brain cells to rub together has been saying this forever. There really should be two levels of autonomous driving: lane keep + radar cruise, and actual full autonomy. The Autopian has written on it enough, asking humans to sorta kinda maybe pay attention juuuust in case is a recipe for disaster. Humans are bad at that and everyone knows it.
I’ve been pondering The Big Question recently, but already know the answer.
My daily has under 48K miles and I really like it, so it stays. I may need a car at some point but I’ll burn that bridge when I get to it.
You might want to cross the bridge before you burn it. At the very least, don’t burn it while you’re on it.
My wife’s CX-5 is 10 years old and just crested 185k miles. It was likely to be replaced this year. That is clearly in jeopardy now. Since it can’t happen today, I am less encouraged to buy a new car now.
As others have mentioned in these comments though, I am also less encouraged to buy anything. We’re happy with our home and have a 2.75% interest rate. We just replaced the kitchen appliances last fall. If consumer sentiment was bad the last couple years, I can’t imagine where it is now.
I just leased a 500e for insanely cheap for the next two years to keep miles off of my other cars. I’m actively considering the offer for a relatively cheap loan on a used car from my credit union to replace my long-distance car, since it’s complicatedish and almost out of warranty. But also still worried about job security as Elmo is still rampaging around, so not really wanting to add debt… Lots to think about, anyway.
My ever-loathed Sorento is in need of replacing, but the budget is not there. Thus, I’ll have to patch it up and see how all of this affects pricing north of the border.
Really regretting not pulling the trigger on the crazy cheap Lyriq lease I was looking at last month..
Aren’t automakers ALWAYS encouraging shoppers to buy a new car right now?
To the point though, nope. My cars are 3, 7, and 30, and none need replacing in the next four years.
Answer to Big Question:
No. I have a car, and I don’t drive it enough to warrant buying a new one (it’s old).
Also, I prefer to have my anus probed by aliens than by Hyundai or Kia dealerships.
I am looking to buy/sell a car and hoping the used semi enthusiast market isnt too effected by tariffs. My hope is the cars I’m interested in would be considered more of a toy than as transportation by any reasonable person, but that’s probably wishful thinking. A rising tide lifts all boats, or sinks the, it’s all the same.
If I needed a car, I would certainly be shopping this week.
As it stands though, barring any unforeseen catastrophe, I have the vehicles I need to outlast at least this presidential term.
There is not a single new car on the market that appeals to me.
There is not a single new car on the market in the US that appeals to me. I guess we’re pretty close to agreement at least.
I am more encouraged to buy a car right now. I want another Bolt, but I’m worried the prices of used cars are going to skyrocket. This is going to inflate the used car market tremendously.
The Atlantic has a great read about “The Great Tesla Sell-off”. They actually suggest buying a used Tesla, but not from a Tesla dealer, as it does not help Mushy-face. Since the prices are tanking, it’s not a bad idea. But, you’d have to deal with the hate.
We are taking a (what may be our last) family vacation to Europe next week for nearly equivalent reasons. My concern is in a few months, travel to Europe will be impossible because we are Americans. I feel like we can pull this off while we still carry a bit of respect. I expect to never go back to Europe after this trip. I also expect the dollar to tank, making a trip like this impossible to afford.
Too add to this, I also signed a contract to have my chimney and roof redone. We would have done it in the fall but the weather turned too quickly to do so. The roof contractor had us sign and lock in our price before April 1st, as he said ALL his prices would go up. So, we did.
I’m curious to know, is he buying bricks and shingles from Canada? Not something I would expect to be greatly impacted but I’m far from a material resource expert as one can be. Also, makes me worried as my Chimney has been needing some work. I guess we wait until it starts leaning……
No clue. I only know he said all his prices were going up starting today. It’s two different contractors. My roof leaks at the chimney, and this is LONG overdue.
Asphalt shingles are a relatively local business because of the weight which results in high shipping costs. The shift from regular to fiberglass felt 30 or so years ago did cause a consolidation because you could run the fiberglass felt 10x faster through the machines because the fiberglass felt doesn’t stretch (or has minimal stretch) which created longer shipping radiuses as 90% of the factories closed. The modern asphalt shingle is basically made from fiberglass felt, oil, and stone. The stone is usually locally sourced (hopefully with an eye towards no silica), with the other products shipped in (in most places). Unless there is a big oil price increase, the shingles should not be heavily impacted – although if you are sorta near the Canadian border I could see some price rises. My quick google search suggests that less than 3% of asphalt shingles come from Canada – but I didn’t verify the sources. Steel roofing, however will go up 25% because although much (most?) steel roofing is made domestically, the steel market pricing is going to go up because we import most of our steel and the domestic manufacturers will raise their prices to meet the new imported total cost (material + tariff).
Of course, most of the cost of a roof is labor – which is going to become much more expensive and unavailable due to ending of TPS status for many countries, which will take ~1 million people out of the labor force.
What about all the Americans who are clamoring to do back-breaking work 40 feet in the air on a slope while exposed to the hot sun for minimum wage, what about them?
Oh yeah, I forgot, we can just import the children from Florida that they are trying to exempt from any employment rules.
Flying the economy into the side of a mountain for no reason at all. I am so tired of living in the dumbest simulation ever.
There’s a whole bunch of reasons:
Tax cuts for the rich
Screwing people that have slighted us
Isolationism
Driving out competition on EVs for your new best bud
Intentionally crashing the economy so your homeboys can buy shit on the cheap
The list goes on
Screwing people that have slighted him not us.
FIFY
I personally are quite fond of the Canadians, but clearly a lot of people disagree. Nothing pisses off a conservative American like the words “guaranteed healthcare”.
I’m not sure how our friends to the north got brought into this conversation but I’d be a fan of “ guaranteed healthcare “.
Calling him dumb as a stump is an insult to stumps.
Higher prices could push more people to the subscription model (aka leasing). That’s good news for the manufacturers is it not?
But leases are based on depreciation of the vehicle.
Automakers not having any idea what the value of a vehicle will be in 36 months is an issue for pricing lease offers. So….time will tell? Someone might have a better idea than me.
They can use some standard and if they’re wrong the customer gets a ‘deal’ on the car after they’ve over-paid for the depreciation and if they’re right then the dealer gets a used car to sell at a mark-up and a new lease for the customer who still can’t afford to buy but isn’t good at math and wants something new.
They can lose, but it’s not likely in the massive inflationary situation we’re in now and will be in the foreseeable future.
I wonder how the tariff will effect the used car market.
Pretty obvious I think. If new car prices increase, so will used.
Demand will shift to the less expensive option causing the used prices to climb as well. That is why even though we are a year away from replacing one of our cars, I will just wait it out because I expect the resale value to hold on our current car. Probably best to wait several months for the used prices to come up before trading on something new to avoid trading before the used values go up, assuming the new car prices all rise quickly.
I’ve mentioned this elsewhere, but to reiterate my thoughts:
There will also be new car shortages like during the pandemic. Some models just won’t be imported because sales are already low. Some models will have demand spike because the competitor’s prices just shot up.
The demand for used will go up, not just because of the price for a new car but also because of supply shortages. Used car prices are going to soar.
Same thing that happened to used cars the last time new car prices skyrocketed. Carvana is licking its chops right now.
What a great time to be a broke teenager looking for a car!
Is there ever a good time?
What an even worse time to be a broke teenager looking for a car!
Wonder who gets all that tariff money? Giving a fiscally irresponsible organization billions of more dollars seems really dumb… but here we are.
I just quit my side gig at the dealership, it was getting in the way of my goofing off. Probably a good thing, if sales are up they would have needed more transport drivers which means more hours working and less hours not working. That’s not why I retired!
I am more encouraged to keep what I have running. I do not want to buy anything.
That may be part of the overall problem, though….
I’m not encouraged to buy ANYTHING right now. Can’t afford a home, can’t afford a car, simply existing is expensive.
With our current administration trying their hardest to make things worse for the 99%, even getting a “good deal” on a vehicle now may not be a smart move as the future is so uncertain.
I was thinking about a vehicle towards the end of last year, but I’ve noticed used prices of that vehicle have gone up significantly since then, turning me off. I don’t know if it was cyclical due to lease returns, or in anticipation of tariffs, but I could have gotten a significantly better deal in Q3/4 of 2024.
Too late to edit, so here’s a follow up:
My 12-year-old 4Runner is nearing 200k, luckily 300k and beyond isn’t much a stretch for these. A couple K in old car suspension/steering maintenance and I’ll be good to go.
If I buy ANY vehicle, it’s going to be something somewhat fuel efficient for 5k-ish as a DD, and/or a K5 Blazer, as I see the values of those continuing to go nowhere but up. Parking my cash in one of those is probably not the dumbest thing I could do.
Very similar for me. GX at 155k and making suspension and steering and transmission noises. Repair.
Wife’s Highlander. 90K. Transmissiony fun. Repair.
Daughter’s Fit. Runs like a top at 160k
I snagged an early Pathfinder (2003) as a child trainer/beater/spare and something tells me I should keep that together as long as I can. No way an auction vehicle goes for 1K anymore.