News - Supply Chain Crisis: Massive Backlogs in the U.S. and Soaring Shipping Rates

Detroit — Inventory of new and used cars in the United States is falling quickly as consumers race to vehicles ahead of price increases that could come with tariffs, according to car dealers and industry analysts.
The number of days’ supply of new vehicles, calculated on an estimated daily rate, fell to 70 days this month from 91 in early March, according to Cox Automotive. The company said the already-low daily supply of used vehicles by 4 days to 39.
“Consumers are trying to beat the import tariffs,” Cox chief economist Jonathan Smoke said Tuesday during an online update.The drop-off in days’ supply is one of the largest we’ve seen in several years.”
Compared with a normal market, where the supply fluctuation is on the order of five to seven days a month, Cox said.
New-vehicle sales were up 22 percent from a year earlier on a seasonally adjusted basis up more than 8 percent from the start of the year, Smoke said. Cox estimated that sales in the used market will “rise sharply,” with the year-todate sales pace up 7 percent compared with 2024.
The increase in sales is good news for the auto industry, where many analysts were expecting to be this year. But there’s a fear that once the tariff-free inventory on car lots and at dealerships runs out, sales could stall.
The automotive consulting firmmetry forecast that higher costs for production, parts and other factors will reduce new vehicle sales in the U.S. and Canada by more than 2 million units a year, in due to the cost increases and related price hikes.
Shares of auto companies rose after Trump said he wanted to “help” some automakers. Trump’s 2 percent auto tariffs, which are already in effect, are expected to reduce auto sales by several million vehicles and cost $100 billion. Canada’s 25 percent auto is already in effect. Analysts believe that while automakers and suppliers might be able to absorb some of the cost increase, they also expect them to pass along the cost increases to.S. consumers, which could backfire and reduce sales.
Many car manufacturers built up inventory of imported cars and trucks before President Donald Trump imposed a 25 percent on imported cars on April 3. But some shifted their imports, parking vehicles in ports or stopping imports altogether, such as Jaguar Land Rover.
General Motors has been increasing production in the U.S., including by ramping up an Indiana plant that makes pickups and canceling a planned production stop next month at a plant in Tennessee.
Ryan Rohrman, CEO of the Indiana-based Rohrman Automotive Group, said last week that the start of April was “off to a pretty strong start” which would indicate that both tariffs and panic buying and inventory have improved from what it was like in recent years.
“The business is actually pretty strong right now,” said Rollman, whose group has 22 franchise locations. “March was good, and it hasn’t slowed.”
Automakers Ford Motor and Stellantis, the parent company of Chrysler, see the tariffs as an opportunity to reduce inventory offering customers “employee pricing” deals.
Nick Anderson, general manager of a Ford dealer in Missouri, said the unique discounts and concerns that prices may soon rise because of tariffs are prompting more price-sensitive consumers to come to his showroom. That’s good for sales but is having a negative impact on the store’s gross profit.
“We’re working hard to catch up or exceed last year,” he said. “A lot of the people that we’re seeing are definitely more sensitive to price. unit sales are still there, but our total gross is down. It’s just a different type of customer.”
Anderson said he is optimistic about sales this year but “it’s highly dependent on what the tariffs look like in the next 60 to 90 days.”
Trump said Monday that he is seeking ” help some of the auto companies,” but he did not elaborate on what that might entail.
Stellantis Chairman John Elkann expressed his “encouragement” at the annual meeting of auto manufacturers in response to Trump’s comments, noting that the 25% tariffs on imported cars and strict European emission rules have put two car marketsat risk.”