Domestic automotive sales in June were at their lowest level in nearly a year, as consumers continued to pull back on purchasing with US tariffs raising costs for vehicle importers and domestic manufacturers.
Sales of light vehicles — trucks and cars — fell to a seasonally adjusted annual rate of 15.3mn units in June, down from 15.6mn in May, the Bureau of Economic Analysis reported Wednesday. Last month's total was above June 2024's annualized rate of 15mn but the lowest since last August's 15.1mn pace.
Consumers began to realize the full effect of US tariffs targeting foreign-made automotives and parts in June, as prices for new vehicles have increased because of the extra 25pc duties on imports.
Adding to cost pressures were high interest rates on auto loans, as borrowing costs have remained elevated following the US Federal Reserve's decision to leave its target interest rate unchanged at 4.25-4.5pc at its June meeting. The Fed has kept the rate flat so far in 2025 after making three cuts late last year.
Fed policymakers have said they will wait to assess the impact of US president Donald Trump's tariffs and other policies on the domestic economy before making any adjustments to monetary policy. Trump has repeatedly publicly berated Fed chief Jerome Powell for ignoring Trump's demand to lower borrowing costs.
Sales of trucks in June dropped by 1.6pc on the month to a 12.8mn unit annual rate, while car sales fell by 2.3pc to a 2.5mn unit rate in the same timeframe.
Domestic vehicle production in May surged to a seasonally adjusted annual rate of 10.92mn from an upwardly revised 10.18mn in April, according to US Federal Reserve data. That compares with 10.51mn in May 2024. Auto assemblies are reported with a one-month lag to sales.
