American automaker Ford (F) revealed that May sales rose 16% year-over-year, illustrating a strong spring season for the car brand.

Yahoo Finance senior autos reporter Pras Subramanian breaks down the auto industry's performance under back-and-forth tariff messaging from the Trump administration, also highlighting inventory and pricing strategies from Kia (000270.KS), Hyundai (005380.KS, HYMTF), and Porsche (PAH3.DE).

Read up on the sales declines EV manufacturer Tesla (TSLA) is seeing in European markets.

To watch more expert insights and analysis on the latest market action, check out more Catalysts here.

Video Transcript

00:00 Pras Subramanian

We've got monthly sales data from several major automakers including Ford, Hyundai and Kia. Yahoo Finance's senior autos reporter Pras Subramanian has the latest. Pras, let's start off with Ford. You said there was strength by the way across the board, but let's kick it off with Ford.

00:14 Pras Subramanian

Yes, so far, so far. Big gains by Ford but for how long is is is the question there. So, Ford sales up 16% led by trucks and SUVs. Hybrid surging too, still very popular amongst Ford customers in the US. Uh now Ford introduced employee pricing, uh, right soon soon after the tariffs were announced. Uh, it was seen as sort of a cynical move but they it actually worked. They're eating into market gains, they're getting market gains there through that, that pricing program. Uh, so that's a good move there. Um, the question is how long they can be they can maintain that, right? Price hikes are coming. They've already said models made in Mexico like the Maverick and the Mustang Mach-E you're gonna get price hikes too. So, real quick also the Korean automakers Hyundai and Kia, both doing well. Hyundai up 8%, Kia up 5%. Uh, Hyundai kept pricing the same through June 2nd. Sorry, June 3rd now. So the question is how long are they gonna make are they gonna raise prices? Are they gonna keep the same? Can they even cut prices? We'll see.

01:50 Rachelle Akuffo

And what are you hearing about how these companies are thinking through the price increases when the tariff policy continues to change?

02:01 Pras Subramanian

I mean, the tariff policy for at least with autos is has been the same. Uh, 2.5% since April 2nd or 3rd. Uh, now countries like the UK had a trade deal where they went to 10%. So that's helping them out. So the the Koreans and and in the USMCA they're waiting for can we get some pricing relief here from tariffs. It hasn't been the case so far. The ink is not yet dry or even wet on any of these deals. That's the big question. So, uh, I think you're right about with with Hyundai and Kia in particular, they're trying to move as much production as they can to the US, and that's a tough move. So, uh, we'll see because right now they're they're probably eating into their profit margins right now, uh, and they but they don't want to lose customers, they want to lose market gains or or some market share here, and that's sort of that balance, right? Is how do I maintain market my market share without destroying my profits?

03:45 Rachelle Akuffo

How much of the price increases can they actually pass through? Is it a portion of it? And then how many, you know, percentage-wise? And are some some automakers having a different perspective than others in terms of their their plan here?

04:02 Pras Subramanian

Yeah, you know, so so for instance, uh, Porsche for instance has said that they want to pass on as much, not they'd want to, but they're going to pass on as much as they can to the the consumer because they have a a product set that people want, right? 911 sports cars are highly desirable. You can maybe pass on a good amount of that tariff uh, price change to them. Cars in a competitive price price set, volume cars, mid-market cars, you can't pass on that much to the consumer because they're gonna get hit by another by another competitor. So that's a problem.

05:01 Rachelle Akuffo

And to that end, which automakers stand to potentially use this as an opportunity to eke out market share from competitors by keeping prices low. Does anyone have that luxury?

05:15 Pras Subramanian

So Ford just just is blowing it out of the water because they're they did that employee pricing, and I heard other automakers complain about that like, "Why are they doing that? I don't understand." This is why they're doing it because they're seeing it as an opportunity to say, "Hey Americans, we're going to help you out here. We know price hikes are coming. We're gonna lower prices for you." And that was a good sort of PR marketing goodwill move by them. Hats off to them for doing that. Other automakers saying, "We might want to preserve our sort of pricing power here and our and our profits here and maybe do that later." And maybe you'll see other automakers follow that in those footsteps, but right now you see the Ford warning at 1.5 billion in lost profits, GM almost potentially 5 billion without mitigation efforts and lost profits. So that's where we're standing.  Related Videos

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