Tariffs will quickly batter U.S. car sales as some prices rise by $5,000 to $10,000. Some car companies have another problem: They are almost out of inventory. These may even run out before tariffs affect car manufacturers’ US revenue. Many Americans are swiftly eating up new car inventory to avoid what could be much higher prices.
Key Points
Honda Cars Are Hot Sellers
Inventory Matters If Tariffs Last A Long Time
Ford, Chevy, and Toyota Top The Sales Lists
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Honda (NYSE: HMC) has one of the tightest U.S. inventories, with an average dealer’s supply of only 38 days. Some hot-selling hybrids only last a month. Honda is the fourth largest car company in the US based on sales, behind Toyota (NYSE: TM), Ford (NYSE: F), and Chevy. Last year, US sales were just below 1.3 million units.
Honda has some of the hottest-selling models in the US. The dealer inventory supply for the CR-V is below 38 days. Honda sells over 47,000 of these a month, which makes it one of Honda’s best-selling models. The days on the lot for the Civic are also below 38 days. Honda sells over 22,000 of these. According to Car Edge, the inventories of these are getting lower.
Civid Is Hot Seller
Among the reasons Honda’s demand is so high is its quality reputation. US News ranked it “The Best Car Brand” for the fourth year. Its editors wrote it received “high scores for the award’s key attributes of performance, interior quality, safety and reliability for its passenger car models, including Civic, Civic Hybrid, Civic Type R, Civic Si, Accord and Accord hybrid.” US News looked at 38 brands.
Honda also does well in the closely followed J.D. Power and Consumer Reports rankings, which examine 30 brands.
Many people think foreign cars have only recently been introduced into the US. Not so for Honda, which began selling cars in the US in 1970. The 1970s energy crisis cemented its position in the market. Its Civic sold briskly because it got high gas mileage.
High Mileage
The odds of tariffs on cars and car parts made outside the US are relatively high. Honda does have one advantage over many foreign car companies. About 70% of the cars it sells in the US are made in the US.
Most economists believe that high tariffs will lower American car inventories. A low inventory of Hondas at its dealers means the company will quickly run out of cars.
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