US second-quarter auto sales rise, tariffs may drive up prices

By Nathan Gomes

July 1 (Reuters) - U.S. auto sales rose in the second quarter fueled by demand for gasoline-powered vehicles, but the industry is bracing for a bumpy latter half to the year as President Donald Trump's tariffs will likely push prices higher.

General Motors GM.N retained its top spot with a 7% rise in quarterly auto sales driven by demand for lower-cost crossover SUVs such as the Chevrolet Trax.

The tariffs initially pulled forward demand from price-sensitive buyers, but that boost is expected to fade as higher prices take hold.

Crosstown rival Ford Motor F.N reported a 14.2% rise in quarterly sales, while Toyota Motor's 7203.T North American unit posted a 7.2% rise.

The tariffs are expected to hit budget-friendly imported models, including Ford's compact Maverick pickup and GM's Trax, denting affordability concerns as the average new-vehicle price nears $50,000.

"Much of the pull-ahead demand that fired up sales in April and May has now been satiated, so consumer demand is expected to be weaker in the coming months," said Charlie Chesbrough, senior economist at Cox Automotive.

Overall, U.S. new vehicle sales in June stood at around 1.25 million units, which represent a seasonally adjusted annual rate of 15.34 million units, according to data released by Wards Intelligence on Tuesday.

Hyundai Motor 005380.KS also notched a 10% year-over year rise in U.S. sales during the quarter.

"The second half is going to be challenging. There's a lot of headwinds out there. Interest rates are still very high, obviously you've got the political swirl," said Randy Parker, CEO of Hyundai Motor North America.

Pat Ryan, CEO of car-shopping app CoPilot, said higher vehicle prices were nudging buyers toward the used market, although he expects buyers to find it "more challenging."