Auto Industry Faces Challenges Ahead
In July 2025, the auto sector is expected to grapple with a significant slowdown in sales and rising vehicle prices, as per ZeroSum's latest report titled "State of the Dealer." After nearly three months of strong demand, largely fueled by consumers rushing to purchase vehicles before expected tariff-related price hikes, the industry is anticipating a "hangover" effect.
Sales Slowdown and Price Increases
From March to June, nearly 500,000 new vehicles were sold ahead of the anticipated tariff increases. However, analysts predict that the current momentum may stall, leading to flat sales figures for July. As many as two-thirds of new vehicle models saw price increases in June, indicating a tough road ahead for dealerships relying on new car sales. The projected vehicle sales for July are expected to be around 1.155 million units, comparable to June's performance.
Josh Stoll, Vice President of Dealer Success at ZeroSum, noted, "With the considerable pull-ahead sales and the continued realities of tariffs, we foresee a challenging landscape for auto sales in the coming months."
Insights on Average Market Prices
The Average Marketed Price (AMP) for new vehicles has remained stable at $49,614, though this masks a reality where two out of three vehicle models have seen price appreciation. To combat this, manufacturers are concentrating on producing vehicles in lower-priced segments. For instance, mid-size SUVs and small SUVs witnessed significant growth, with AMPs standing at $38,573 and $32,363 respectively. In contrast, full-size trucks and XL SUVs have experienced inventory declines, signaling shifting consumer preferences.
Rise in Used Vehicle Demand
As new vehicle sales slow, dealers are now increasingly reliant on used and certified used vehicles to maintain profit margins. The AMP for used vehicles increased from $26,258 in May to $26,681 in June, reflecting growing demand in this segment. Certified used vehicles also saw a rising trend, with prices escalating from $37,716 to $38,036 during the same time frame.
Stoll emphasized the importance of this pivot: "The rising prices and reduced inventories are pushing consumers toward the used car market, enabling dealers to find profitability in this segment during tougher times."
The report reaffirms ongoing trends witnessed in the auto industry, which include declining inventories, swift vehicle turnover, and elevated pricing levels. However, the potential for sustained growth seems limited as the effects of the tariff situation linger.
Conclusion: Navigating a Complicated Landscape
As automotive dealers traverse this increasingly complex environment marked by pricing pressures and fluctuating consumer behavior, an adaptive strategy centered around used vehicle sales may become crucial. While some segments show growth, the overarching trends driven by tariffs and consumer demand evaluations are likely to define the trajectory of the industry for the next few months. ZeroSum’s ongoing tracking of vehicle movements, turn rates, and pricing data will remain a vital tool for dealers navigating this landscape.
For a deeper dive into the trends influencing the automotive sector, including vehicle movement metrics and comprehensive market insights, download ZeroSum's full "State of the Dealer Report."
About ZeroSum
ZeroSum is a leader in market intelligence and digital marketing solutions tailored for the automotive industry. By leveraging advanced technologies, ZeroSum facilitates optimized marketing strategies for dealers by providing real-time data that aligns consumer preferences with automotive offerings. Explore more about ZeroSum and its innovative solutions at
www.zerosum.ai.