The Trump Administration’s trade policy has been front and center in the news and certainly a point of focus for the automotive industry over the past six months. Tariffs on materials, parts, systems, and fully produced vehicles have been threatened, enacted, and adjusted, and all eyes have been on expected price hikes to account for widespread increased costs.
But a funny thing happened on the way to consumer sticker shock. Cloud Theory’s Average Marketed Price metric—which reflects the discounted and incentivized costs visible to consumers on dealers’ vehicle detail pages—has gone down over the past month after hitting a recent high of $50,157 on June 5. In the latest two-week period, the AMP dropped by $320 compared to the period shortly after Memorial Day.
But while this overall number has been in retreat, the reality is quite the opposite. The best way to determine if prices are going up is to compare model/trim combinations between two time periods. We looked at model/trims with 500 vehicles or more in inventory—943 in all—and discovered that 774 of them, or 82%, increased in AMP when comparing current pricing (July 9) to one month earlier.
And many of those price increases are substantial in scope—41 of them jumped by $1,000 or more, and 175 rose by $500 or more. In contrast, the number of model/trims that decreased in price by those amounts were 3 and 14, respectively.
The shift in segment inventory mix explains this paradox. In the latest two weeks, there are almost 25,000 more Small SUVs (with an average AMP of $32,382) and 16,000 more Mid-Size SUVs (AMP of $38,634) in the supply pool. Full-Size Trucks ($58,733), XL SUVs ($79,414), and Luxury Full-Size SUVs ($80,107), meanwhile, are declining in their inventory counts, which pulls the overall average downward.
Had the segment mix stayed the same, the AMP would have been $50,323 in the latest two weeks—an increase of $385 rather than the $320 decrease that actually occurred.
It is clear that OEMs are responding strategically to tariff pressures by adjusting their inventory mix, which helps soften the blow at the aggregate level. But for consumers unwilling to compromise on model or trim, the cost increases are very real and increasingly unavoidable. As sticker shock looms larger for shoppers, automakers will need to stay vigilant—balancing cost pressures with careful portfolio management to keep demand from drifting out of reach.
