J.D. Power-GlobalData Automotive Forecast March 2025

Total New-Vehicle Sales Expected to Rise 9.6%, Retail up 13.0% as Consumer Spending Expected to Set Monthly Record for March

TROY, Mich.--(BUSINESS WIRE)--J.D. Power:

The Total Sales Forecast

Total new-vehicle sales for March 2025, including retail and non-retail transactions, are projected to reach 1,525,200, an 9.6% increase from March 2024 according to a joint forecast from J.D. Power and GlobalData. March 2025 has 26 selling days, one fewer than March 2024. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 5.5% from 2024.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.8 million units, up 1.2 million units from March 2024.

New-vehicle total sales for Q1 2025 are projected to reach 3,860,000 units, a 5.3% increase from Q1 2024 when adjusted for selling days.

The Retail Sales Forecast

New-vehicle retail sales for March 2025 are expected to increase from a year ago. Retail sales of new vehicles are expected to reach 1,268,200, a 13.0% increase from March 2024. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 8.9% from 2024.

New-vehicle retail sales for Q1 2025 are projected to reach 3,168,000 units, an 8.4% increase from Q1 2024 when adjusted for selling days.

The Takeaways

Thomas King, president of the data and analytics division at J.D. Power:

“March results reflect a continuation of recent trends, with robust consumer demand for new vehicles delivering a sixth consecutive month of retail sales growth. The 13.0% year-over-year retail sales increase is particularly strong, enabled by consumers accelerating purchases to avoid potential tariff-related price increases.

“While the tariff situation remains both fluid and uncertain, the prospect of tariffs is already beginning to affect the industry. In addition to the boost in March sales, anticipated increases in manufacturer and dealer discounts have not materialized, even as inventory on dealer lots rises. Although the magnitude of these effects is currently modest, they do present a preview of potential disruption as manufacturers, dealers and consumers prepare for uncertainty in the coming weeks and months.

Discounts from manufacturers are up significantly from a year ago, but down from a month ago. The average incentive spend per vehicle is expected to grow $235—8.3%—from March 2024 and is on track to reach $3,059. Expressed as a percentage of MSRP, incentive spending is currently at 6.1%, an increase of 0.3 percentage points from a year ago. Compared with February, however, spending is expected to decrease an average of $102.

“The situation is similar for retailer profitability, which is down significantly from a year ago, but stable compared to February. Total retailer profit per unit—which includes vehicles gross plus finance and insurance income—is expected to be $2,212, down 8.0% from March 2024, but up $54 from a month ago.

“The fact that discounts are not increasing materially, even as inventories rise, is consistent with emerging expectations of future tariff-related price increases. Retail inventory levels are expected to finish around 2.2 million units, a 31.3% increase from March 2024 and a 3.7% increase from February.

“The strong March sales pace, combined with high average transaction prices mean consumers will spend more money buying new vehicles this month than any other March on record. The average retail transaction price for new vehicles is trending toward $44,849, up $637 from March 2024. Multiplied by the sales pace, this means buyers are on track to spend nearly $53.5 billion on new vehicles this month—9.5% higher than a year ago.

“For retailers, the rise in sales is not quite enough to offset the decline in per unit profits. Total aggregate retailer profit from new-vehicle sales for this month is projected to be $2.6 billion, down 0.7% from March 2024.

“Consistent with recent months, while the retail sales pace has been growing, sales to fleet customers are falling. Fleet sales are projected to decline 4.7% from a year ago, as manufacturers continue to prioritize retail buyers over the historically less profitable fleet channel. Nevertheless, there is a significant opportunity for manufacturers to increase fleet sales during the rest of the year, although larger discounts will be required for this to happen.

“The average used-vehicle price is trending towards $28,552, down just $22 from the same time last year. This reflects the combination of reduced supply of recent model-year used vehicles, due to lower new vehicle production during the pandemic, combined with fewer lease maturities, plus discipline from manufacturers to moderate the discounts available on new vehicles. The used market is also being influenced by emerging tariff-related price concerns. While the effect is not yet material, any increase in new-vehicle prices will inevitably lead to higher used-vehicle prices.

“Stable used-vehicle prices mean that average trade-in equity is expected to rise slightly, up $242 year over year to $7,641. However, a growing share of new-vehicle buyers are facing negative equity on their trade-ins. Currently, 24.6% of trade-ins carry negative equity—an increase of 0.7 percentage points from March 2024. This negative equity trend is intensifying the industry’s affordability challenges. More consumers are now contending with both elevated new-vehicle prices and negative equity, resulting in even higher monthly loan payments.

“Vehicle affordability remains a key challenge for the industry and is the main reason the sales pace—though improving—has yet to return to pre-pandemic levels. Average monthly finance payments in March are on track to reach $731, an increase of $12 from March 2024, and the highest on record for the month of March. Payments are getting no help from interest rates for new-vehicle loans, which are expected to remain flat year over year at 6.82%. With monthly payments at record highs, and tariff-related price increases on the horizon, affordability is likely to become an even greater focus in the coming months.

“As the first quarter of 2025 comes to an end, the U.S. auto industry is generally performing as expected. There is a continuation of well-established trends that point to gradual increases in the sales pace at the expense of gradually larger discounts and reduced profitability.

“Tariffs can significantly disrupt current market dynamics. The situation is fluid and uncertain, but should auto industry tariffs take effect, there will be near-term pressure to increase vehicle prices. Tariffs have the potential to affect manufacturers differently—based on their overall manufacturing footprint—and they can also affect models within a manufacturer's portfolio based on production location. Absent clarity on auto industry tariffs, the specific consequences are impossible to define. The likelihood of significant near-term disruption is high for the entire automotive ecosystem from suppliers and manufacturers to retailers and consumers.”

Sales & SAAR Comparison
U.S. New Vehicle	March 2025^1, 2	February 2025	March 2024
Retail Sales	1,268,225 units (13.0% higher than March 2024)^2	988,937 units	1,165,443 units
Total Sales	1,525,216 units (9.6% higher than March 2024)^2	1,229,233 units	1,445,365 units
Retail SAAR	14.1 million units	13.5 million units	12.6 million units
Total SAAR	16.8 million units	16.4 million units	15.6 million units
^1Figures cited for March 2025 are forecasted based on the first 19 selling days of the month.
^2March 2025 has 26 selling days, one fewer than March 2024.

The Details

• The average new-vehicle retail transaction price in March is expected to reach $44,849, up $637 from March 2024. The highest for any month—$47,329—was set in December 2022.
• Average incentive spending per unit in March is expected to reach $3,059, up $235 from March 2024. Spending as a percentage of the average MSRP is expected to increase to 6.1%, up 0.3 percentage points from March 2024.
• Average incentive spending per unit on trucks/SUVs in March is expected to be $3,174, up $197 from a year ago, while the average spending on cars is expected to be $2,515, up $286 from a year ago.
• Retail buyers are on pace to spend $53.5 billion on new vehicles, up $4.6 billion from March 2024.
• Trucks/SUVs are on pace to account for 81.3% of new-vehicle retail sales.
• Fleet sales are expected to total 256,991 units in March, down 4.7% from March 2024. Fleet volume is expected to account for 16.8% of total light-vehicle sales, down 2.5 percentage points from a year ago.
• Average interest rates for new-vehicle loans are expected to be 6.82%, flat from a year ago.

EV Outlook

Elizabeth Krear, vice president of the electric vehicle practice at J.D. Power:

“March was a month of stability for EVs as shopping sentiment stabilized at 23% among consumers who said they are ‘very likely’ to consider an EV for their next vehicle purchase. This matches purchase sentiment from March 2024.

“Notable, too, is that EV retail share is on the rise, crossing the 10% threshold so far this month. A year ago, Tesla held 56% of EV retail share, but that figure has dropped to 50% so far in 2025. The fastest-growing brand in the EV segment right now is Chevrolet. Overall, EVs have demonstrated a lower total cost of ownership than non-EVs for 13 consecutive months.”

Global Sales Outlook

David Oakley, manager, Americas vehicle sales forecasts at GlobalData:

“February global light-vehicle sales increased 8.3% year over year to 6.6 million units, as the global market continued to improve overall. The selling rate for February finished at 86.8 million units. While this rate represented a decline compared with the 88.9 million units in January, it was the highest February rate since 2018.

“There were significant regional sales variations in February. Global growth was driven by an extremely strong result in China, where sales increased 36% year over year on the advantageous timing of the Lunar New Year, which occurred earlier in 2025 than in 2024. While similar—though less dramatic—growth was observed elsewhere in Asia, sales performance was less positive in the United States (-1.8%) and Western Europe (-4.4%).

“March sales are expected to increase about 5% from March 2024. China, Japan and India should be significant contributors to the gains. The selling rate is forecast to be close to 88 million units, up from a rate of 84.2 million units in March 2024.

“Trade tensions are on the rise, bringing the potential for a slowdown in the global economy and a pullback in auto sales, in particular. However, the industry is showing resilience for now, and we continue to forecast global sales growth in 2025 to 91.5 million units, up more than 3% on 2024 volumes. Scrappage subsidies in China and growth in other Asian markets are expected to deliver an increase in sales overall, although downside risks are mounting.”

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