US: Motor Vehicle Sales

Motor vehicle sales jump to a 17.8 million units at a seasonally adjusted annual rate in March after 16.0 million units in February. The March pace is well above the consensus of 16.0 million units in the Econoday survey of forecasters. Sales of domestically produced motor vehicles is up to 13.6 million units in March after 12.2 million in February.

It appears that consumers are buying motor vehicles now in anticipation of higher prices related to tariffs that will affect both costs and supplies of imported parts and completed vehicles. The effect was particularly noticeable in the light trucks category. While the end-of-quarter rush to buy motor vehicles will boost consumer spending in the first quarter 2025, it will provide much less support to growth in the second quarter.

Sales of domestic passenger cars are up to 2.074 million in March from 1.960 million in February while sales of imported passenger cars is slightly higher at 1.041 million from 991,000 in the prior month. Total sales of passenger cars is up to 3.114 million units in March from 2.952 million in February.

Sales of light trucks which includes SUVs, minivans, and crossovers total 14.653 million units in March after 13.060 million units in February. Sales of domestic light trucks are 11.515 million units in March after 10.228 million units in February, while foreign built light trucks are at 3.137 million units from 2.832 million units in the prior month. Light trucks maintained their record high of an 82 percent share of all motor vehicles sales.

Sales of heavy trucks which are mainly a business investment fall to 403,000 in March after 436,000 in February and 492,000 in January. The slowing pace of purchases at an annual rate points to less spending on business equipment after a rush to get ahead of higher prices and also in higher business uncertainty and unwillingness to spend unless necessary.

Seen unchanged at an annual 16.0 million unit rate in March versus 16.0 million in February.

Unit sales of motor vehicles, published by the Bureau of Economic Analysis at the beginning of each month, include domestic sales and imports. Domestics are sales of autos produced in the U.S., Canada, and Mexico. Imports are U.S. sales of vehicles produced elsewhere. The data track all passenger cars and light trucks up to 14,000 pounds gross weight (including minivans and sport utility vehicles). Though totals include a relatively small portion sold to businesses, motor vehicle sales are good indicators of trends in consumer spending and often are considered a leading indicator at business cycle turning points.

Since motor vehicle sales are an important element of consumer spending, market players watch this closely to get a handle on the direction of the economy. The pattern of consumption spending is one of the foremost influences on stock and bond markets. Strong economic growth translates to healthy corporate profits and higher stock prices. The bond market focus is on whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. This balance was achieved through much of the nineties. For this reason alone, investors in the stock and bond markets enjoyed huge gains during the bull market of the 1990s.

Retail sales growth did slow down in tandem with the equity market during the 2001 recession but then, boosted by a low interest rate environment, rose sharply through 2007 before falling sharply during the Great Recession. Sales then recovered and, once again boosted by low rates, began a long period of steady and favorable growth.

In a more specific sense, auto and truck sales show market conditions for auto makers and the slew of auto-related companies. These figures can influence particular stock prices and provide insight to investment opportunities in this industry. Given that most consumers borrow money to buy cars or trucks, sales also reflect confidence in current and future economic conditions.