San Francisco Frontiers - US automakers report mixed sales as car market awaits war impact

The US-Israeli offensive against Iran, launched on February 28, has boosted oil costs by more than 50 percent, sending gasoline prices to more than $4 per gallon in the United States.

While that adds to the affordability challenges facing the industry, experts and automakers say it is too soon to determine the war's overall impact on sales.

General Motors said Wednesday it sold 626,429 vehicles between January and March, and that the early part of the quarter was marred by "severe winter weather," while March emerged as a "much stronger month."

It also cited the "exceptionally high" level of sales in March 2025, when worries about expected tariffs from President Donald Trump prompted shoppers to rush car purchases.

Meanwhile, Toyota Motor North America reported 569,420 first-quarter vehicle sales, down 0.1 percent from a year ago.

But FCA US, the US affiliate of Stellantis, reported a four percent increase to 305,902 from its line-up, which includes Jeep, Dodge and Alfa Romeo.

And Hyundai reported a one percent increase to 205,388 units.

Other leading automakers, including Ford and Tesla, have yet to release first-quarter figures.

Cox Automative projected a US sales decline of 6.5 percent, with the boost from expected lofty tax refunds offset by affordability difficulties and anxiety about the war.

Exactly how the Iran conflict impacts auto sales will depend on its duration, especially if higher inflation prompts central banks to keep interest rates high, or raise them higher.

The war "adds tremendous amount of uncertainty to the vehicle market," said Charlie Chesbrough, an economist at Cox Automotive.

A note from Oxford Economics pointed to improving dynamics in March after winter storms abated.

"However, sales will face major headwinds as higher gas prices due to the US-Iran war take a bite out of consumers' real disposable income growth," Oxford said.

- Impact on EVs? -

Auto information website Edmunds projected US car sales of 3.7 million in the first quarter, down 6.5 percent from the year-ago period.

"Between severe weather, geopolitical uncertainty, rising gas prices and ongoing affordability challenges, it's no surprise sales are down year over year," Edmunds said.

Deutsche Bank said it did not anticipate an "immediate near-term impact" from the war on volumes, confirming an outlook of 15.8 million sales for this year, down 2.5 percent from 2025.

Analysts that track electric-vehicle maker Tesla expect it sold 365,645 units in Q1, which would be an increase of 8.6 percent from the 2025 period but a decrease of 12.6 percent from the final quarter of 2025.

The outlook for EV sales has been clouded by Trump's elimination of tax credits to encourage sales of the climate-friendly autos.

But an extended period of high energy prices could spark greater interest in EVs.

Searches for EVs on Edmunds accounted for 23.8 percent of customer queries in the week of March 16, up from 20.7 percent in late February.

"While higher gas prices can spur interest in electrified vehicles, they typically need to be sustained or more pronounced to drive a meaningful shift," said Jessica Caldwell, head of insights at Edmunds.

"Right now, many consumers appear to view the latest spike as temporary," she said.

Previous oil-price surges have sent automobile markets into tailspins: Sales dropped 44.7 percent the year after the 1973 oil shock and more than 40 percent after the 1979 Iranian Revolution.

Auto sales plunged 45.5 percent in the year after the 2008 financial crisis, and slid 12.7 percent after Russia's 2022 invasion of Ukraine, according to figures from Anderson Economic Group.

P.Adams--SFF