Korean automakers enjoyed a strong month in January, but Toyota sales stalled as price increases loom and interest rate cuts were postponed.
South Korean automakers enjoyed strong sales results last month.
Asian automakers continued to capitalize on the “buy-in-advance” psychology that appears to have gripped U.S. consumers increasingly wary of rising inflation induced by tariffs and stubbornly high interest rates.
Analysts from Jefferies and Wolfe Research have cautioned the average price of new vehicles could rise between $2,700 and $3,000 this year if President Donald Trump’s proposed 25% tariff on goods made in Mexico and Canda.
The tariffs on Mexican-made goods have been paused temporarily in a deal where Mexico agreed to deploy 10,000 troops along the U.S.-Mexican border in exchange for a crackdown on the flow of guns and ammunition into Mexico.
Sales by Korean brands rise
Kia, Hyundai and Genesis, the trio of South Korean brands largely spared by the tariff threats, reported record sales in January.
The popular Kia Sportage crossover enters the next model year with a number of design and technology updates.
Kia America opened 2025 with the highest January sales in company history with sales of 57,007 units. This figure represents a 12% increase compared to the same period last year, marking the successful start of 2025 after achieving record annual sales for two consecutive years.
This strong January performance included Kia’s SUV and electrified lineup sales increasing over the previous records set in January 2024. Five Kia models set all-time January sales records:
“Kia is experiencing a continuous increase in SUV sales, primarily driven by the exceptional appeal of our X-Line models, and we’re maintaining growth momentum by delighting customers with the launch of K4,” said Eric Watson, vice president, sales operations, Kia America.
Hyundai Motor America reported record-breaking total January sales of 54,503 units, a 15% increase compared with January 2024.
“Hyundai is kicking off the year with record-breaking sales, achieving our best January ever across multiple models and fuel types,” said Randy Parker, CEO.
Genesis Motor America is reporting a record 4,852 total sales in January 2025 representing a 14% increase vs. the prior year. These results were supported by record January SUV sales, including GV60, GV70, and Electrified GV70 models achieving their best-ever start to the year.
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Subaru sales continue to grow
Subaru of America reported 46,354 vehicle sales for January 2025, a 4.1% increase compared to January 2024. January also marked the 30th consecutive month of yearly month-over-month sales increases for the automaker.
Troy Poston, senior vice president of Sales, Subaru of America, said, “Our January sales results extended a 30-month streak of consecutive growth, a testament to our trusted lineup of vehicles and our retailers’ exceptional customer service.”
New vehicle sales were strong in January, but not for Toyota, which lagged its competitors.
Honda up but Toyota stalls
American Honda sales totaled 96,774 units in January, up 3.8% compared to last year, despite winter weather that impacted several markets for multiple days. In the first month of the year, American Honda enjoyed record sales of light trucks and electrified models, overcoming supply issues due to the shutdown of two auto plants in Ohio for most of December in preparation for EV production later this year.
Toyota Motor North America reported January 2025 U.S. sales of 163,585 vehicles, down 1.3%. Toyota Division sales for the month totaled 140,967 vehicles, down 1.6% on a volume basis. Lexus Division sales for the month totaled 22,6186 vehicles, up 0.5% on a volume basis. TMNA’s January 2025 U.S. electrified sales totaled 84,720 vehicles, up 40.6% on a volume basis representing 51.8% of total sales volume for the month — an all-time best-ever.
Both Honda and Toyota, however, are under immediate threat from Trump’s tariffs since popular models such as the Toyota RAV4 and Honda CR-V are made at plants in Canada.
Meanwhile, a decline in interest rates sought by carmakers appears less likely as the Federal Reserve’s pause on rate cuts, and the bond market reacts to fear of future inflation created by the Trump administration’s economic policies
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