Analysts are expecting a decline in the American automobile market in the first quarter, as the sales of the leader General Motors dropped by 10% during this period. In this context, the increase in fuel prices poses a significant threat.
The automotive industry had mixed performances in the United States in the first quarter but is expected to slow down, as sales were affected by the strong storms at the beginning of the year, while, at this stage, being spared, by the consequences of the war in the Middle East. “The current conflict in the Middle East adds an extraordinary amount of uncertainty to the automotive market,” noted Charlie Chesbrough, economist at Cox Automotive, ahead of the release this week of the manufacturers’ figures.
The Israeli-American offensive, launched on February 28, caused oil prices to soar by over 50%. Unleaded gasoline crossed the $4 mark on Tuesday in the United States, a record since 2022. Since cars are essential in much of the country, motorists are paying close attention to pump prices. Their purchasing power is also being eroded by post-Covid inflation, making them very cautious in their spending. Specialists agree that the extent and consequences of the effects will depend on the duration of the conflict, especially if it prompts the US central bank to maintain or, worse, raise interest rates, which would affect the cost of loans.
Cox Automotive expects a 6.5% drop in sales in the first quarter from a year earlier due to storms and an unfavorable comparison base. Indeed, sales in the first quarter of 2025, especially in March, had benefited from a surge of customers eager to buy before the tariffs imposed by President Donald Trump.
Between January and March 2026, General Motors, number one in the US market share, saw its sales fall by 9.7% to 626,429 vehicles, while those of the second-ranked Toyota stagnated (-0.1%, to 569,420). On the other hand, FCA US – the American subsidiary of Stellantis (Chrysler, Jeep, Dodge, Alfa Romeo, etc) – saw its sales increase by 5% to 305,902 units in an environment “filled with challenges for the industry,” according to Jeff Kommor, sales director in the US.
Ford, the third historic American group with GM and Stellantis/FCA, is expected to release its figures Thursday morning. Cox predicts a 9.3% decrease.
Towards a Return to Electric Vehicles?
The electric vehicle specialist Tesla is also awaited. The Austin-based group in Texas is suffering from the revocation of incentives by climate change skeptic Donald Trump, especially the discontinuation of a $7,500 subsidy in the fall. But if the war persists and drives up oil prices further, Tesla and its competitors in electrified vehicles (hybrids and all-electric) could see a comeback in affection.
“A high fuel price can stimulate interest in electrified vehicles, but it needs to be sustainable or more pronounced to trigger a shift,” commented Jessica Caldwell, head of Edmunds Insight, noting that consumers seem to view the “peak as temporary.” Moreover, the Anderson Economic Group (AEG) points out that vehicles are now more fuel-efficient, telecommuting has spread, and the United States is “energy self-sufficient.”
