Sales of new cars in the United States are expected to have risen modestly in 2025, reaching approximately 16.3 million vehicles, despite economic headwinds impacting the auto industry. Several major automakers, including General Motors and Toyota Motor, reported strong sales figures to investors on Monday, indicating a positive close to the year. This resilience is attributed primarily to affluent Americans with secure employment and substantial savings continuing to purchase new vehicles, offsetting decreased sales among lower-income households.

According to Cox Automotive, a research firm, families with an annual household income of $150,000 or more now account for 43 percent of new car sales nationwide, a significant increase from one-third in 2019, prior to the COVID-19 pandemic. In contrast, households earning less than $75,000 now purchase approximately a quarter of new vehicles, a decline from over a third in 2019. "We are seeing a bifurcation of the market," said Jonathan Smoke, C, though his full title was not provided in the source material.

The automotive industry faces ongoing challenges, including tariffs that have increased the prices of cars and auto parts. Furthermore, economic pressures have led to higher default rates on car loans, particularly among individuals with less-than-perfect credit. These factors have disproportionately affected lower-income consumers' ability to purchase new vehicles.

This trend highlights a growing economic divide within the automotive market. While wealthier consumers continue to drive demand for new cars, often opting for higher-priced models and electric vehicles, a significant portion of the population is priced out of the new car market, potentially impacting the long-term sustainability of the industry's growth. The shift also raises questions about equitable access to transportation and the potential for increased reliance on older, less fuel-efficient vehicles among lower-income households.

The automotive industry is closely monitoring these trends and adapting its strategies to cater to the evolving demands of different consumer segments. Automakers are increasingly focusing on developing and marketing vehicles that appeal to affluent buyers, while also exploring options to address the affordability challenges faced by lower-income consumers, such as offering more affordable models or expanding financing options. The long-term impact of this market bifurcation on the automotive industry and broader society remains to be seen.