United States

Vehicle supply tightens amid economic uncertainty

Image Credits: UnsplashImage Credits: Unsplash
  • Trade and economic uncertainty, along with tariffs and semiconductor shortages, are shrinking vehicle supply and driving prices higher.
  • Dealers are experiencing a surge in sales and in-person visits, but they face rising costs for inventory and transportation, creating a volatile market outlook.
  • The automotive industry's challenges reflect broader economic concerns, with supply chain disruptions and trade policies affecting multiple sectors.

Title

[UNITED STATES] Ongoing trade disputes and economic uncertainty are constraining vehicle inventories and driving prices upward, according to new data from Cox Automotive.

As of early May, dealerships held just a 43-day supply of vehicles—the lowest level for this time of year since 2021, Cox Automotive reported. Although slightly improved from the 40.5-day supply recorded in April, the overall trend has been a tightening of inventory over the past year. The shortage is especially pronounced in the used-car market, particularly at lower price points, where affordability continues to be a growing concern for consumers.

With fewer pre-owned vehicles available, prices are climbing. While the latest Consumer Price Index (CPI) showed a 0.5% drop in used car and truck prices from March to April, Cox Automotive observed the opposite trend: rising prices in both wholesale and retail markets. Although the effects of former President Donald Trump's tariff policies have yet to significantly impact CPI data, automakers such as Ford have already announced upcoming price hikes in response to tariff developments.

Used vehicle values are surging. The average price of the top 50 best-selling used vehicles in the U.S. has climbed to nearly $29,000 over the past two months, The Wall Street Journal reported, citing Cox Automotive figures.

The challenges extend beyond trade policy. A global semiconductor shortage continues to hamper vehicle production. Automakers are being forced to trim output due to the limited availability of microchips—essential components in modern cars—further straining the supply pipeline. This shortfall is compounded by an uptick in consumer purchases, as buyers rush to get ahead of expected tariff-related price increases, according to dealer insights shared in a recent Cox Automotive sentiment survey.

The COVID-19 pandemic has also contributed to supply disruptions. Factory shutdowns and labor shortages worldwide have disrupted manufacturing operations, making it difficult to maintain consistent production levels and exacerbating the vehicle shortage.

“Recent sales activity has boosted market confidence among franchised dealers,” said Jonathan Smoke, chief economist at Cox Automotive, in a press release. “But as we’ve warned, 2025 is shaping up to be a turbulent year, and the road ahead could be much more unpredictable.”

In the second quarter, foot traffic at franchised dealerships reached its highest point since tracking began in late 2022. According to U.S. Census Bureau data, sales at motor vehicle and parts dealers were strong in both March and April.

Despite robust current demand, many dealers remain cautious. The combination of trade policy, global supply chain instability, and broader economic unease has created a highly volatile market environment. While recent sales have offered a short-term lift, there’s concern that the momentum may not last.

Washington’s protectionist trade stance is also fueling anxiety over the industry's future.

“The cost to source inventory is higher. Shipping expenses are up. Most third-party service providers have steadily raised their prices,” one Audi dealer noted in the Cox survey.

These issues are reverberating beyond the auto sector. Broader economic pressures tied to trade tensions and supply disruptions are pushing up operational costs and creating uncertainty across industries, potentially impacting long-term economic growth and consumer sentiment.


Transport
Image Credits: Unsplash
TransportJuly 11, 2025 at 11:30:00 PM

Why cars have lines on the rear windshield

You’re driving along, zoning out to a playlist or mentally rehearsing your next conversation, when your eyes flick up to the rearview mirror....

Transport
Image Credits: Unsplash
TransportJuly 10, 2025 at 11:00:00 AM

Why touchscreen hazard lights are a design disaster

You’re cruising down the expressway, music humming, dashboard clean. Then: brake lights flare ahead. Cars swerve. You slam the brakes, barely stopping in...

Transport
Image Credits: Unsplash
TransportJuly 9, 2025 at 6:30:00 PM

Why autonomous vehicles still rely on humans

You might not notice them, but they’re there. Behind the glossy exteriors and whisper-quiet motors of autonomous cars, there’s often still a person...

Transport
Image Credits: Unsplash
TransportJuly 8, 2025 at 4:00:00 PM

Trust AI like you trust planes—but only if we regulate it first

You board a plane and trust a system you can’t see. Pilots speak a language you don’t understand. Flight paths, air traffic control,...

Transport
Image Credits: Unsplash
TransportJuly 6, 2025 at 1:00:00 PM

Avoid storing these items in your car during hot weather

In the right weather, a parked car becomes a little sun trap. The kind you walk into and instantly regret. Sunglasses fog up,...

Transport Malaysia
Image Credits: Unsplash
TransportJuly 3, 2025 at 12:00:00 PM

Perodua positioned to launch Malaysia’s top-selling EV

For decades, Malaysia’s automotive ambitions were treated as a strategic extension of its industrial upgrade pathway—moving from resource extraction toward high-value manufacturing. But...

Economy Singapore
Image Credits: Unsplash
EconomyJuly 2, 2025 at 12:30:00 PM

JB-Singapore RTS Link train marks a new chapter in regional capital flow

The Johor Bahru–Singapore Rapid Transit System (RTS) Link, set to commence passenger service by 2027, is being framed as a transport upgrade. In...

Transport
Image Credits: Unsplash
TransportJune 22, 2025 at 1:00:00 PM

How to keep your electric car cool in the summer

When summer temperatures rise, most people instinctively protect themselves—shade, sunscreen, AC. But electric vehicles (EVs) aren’t quite so instinctual. They rely on how...

Economy Singapore
Image Credits: Unsplash
EconomyJune 17, 2025 at 1:30:00 PM

Why the COE system in Singapore isn’t changing anytime soon

In Singapore, the certificate of entitlement (COE) isn't just a licensing mechanism—it's a policy instrument for controlling scarcity. This week, Acting Transport Minister...

Economy Singapore
Image Credits: Unsplash
EconomyJune 17, 2025 at 12:30:00 PM

Singapore bets on autonomous mobility to close gaps in public transit

Singapore’s renewed commitment to autonomous vehicles is less about futuristic transit and more about resolving an institutional constraint: labor supply. Acting Transport Minister...

Transport
Image Credits: Unsplash
TransportJune 12, 2025 at 5:00:00 PM

Why do new tires have rubber hairs

You’re in the driveway, admiring your freshly installed tires. Smooth black rubber, perfectly grooved tread—and then, those strange wiry little spikes sticking out...

Economy Europe
Image Credits: Unsplash
EconomyJune 10, 2025 at 12:30:00 PM

Eurostar expansion strategy signals high-speed rail power play

This isn’t just a story about new train routes. It’s about infrastructure bottlenecks, regulatory posture, and the defensive mechanics of a first mover....

Load More