Inventory growth for affordable cars under $30,000 has stagnated at 13% over the past two years, even as overall vehicle inventories increased by 5.6%. The shift toward producing higher-end vehicles since the pandemic-era chip shortage has reduced entry-level vehicle production. With heavy reliance on imports, these budget cars are increasingly vulnerable to tariff-induced price hikes. Automakers are distributing rising costs across their lineups, pushing some lower-cost vehicles into higher price brackets. Recent tariffs have made affordable cars more expensive, complicating the market for budget-conscious consumers.
Entry-level vehicle inventory has dwindled since the pandemic-era chip shortage saw automakers shift their attention toward producing more profitable higher-end vehicles.
With aluminum and steel tariffs skyrocketing to 50% and many imported autos having a levy of 25%, these budget-friendly cars have simply gotten more expensive.
Those vehicles are under pressure again, because automakers' costs are going up, but it does push some of them into the next higher price category.
Inventories for cars under $30,000 have stagnated at around 13% over the past two years, while overall units for these budget-friendly cars have increased 3.6% year-over-year.
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