U.S. New-Vehicle Inventory Shrinks 7.4% April Amid Rising Prices, Tariff Uncertainty

New-vehicle inventory in the U.S. declined significantly in April, with supply down 7.4% month-over-month and reaching just 66 days' worth, below the traditional industry target of 75 days, as automakers grapple with tariff uncertainties and slower production. Despite this tightening supply, average listing prices for new vehicles rose to $48,656, marking a 2.8% increase year-over-year, while incentives decreased to 6.7% of the average transaction price, reflecting a seller's market. Retail sales of new vehicles peaked mid-April but slowed later in the month, though overall demand remains relatively strong with a 10.8% year-over-year improvement. Meanwhile, the used-vehicle market experienced a 3.6% month-over-month sales decline in April but maintained an 11.6% increase year-over-year, with average used vehicle prices staying relatively flat compared to last year. The tariff-related sales surge earlier in the year has faded, contributing to these inventory and pricing dynamics, while some automakers and brands face uneven impacts, with luxury and volume brands showing varied pricing trends. These developments highlight the complex challenges dealers and manufacturers face in balancing production, inventory, and pricing amid ongoing trade policy uncertainties.