Auto Industry Is Flashing a Warning Sign on U.S. Economy

The auto industry is flashing warning lights on the state of the U.S. economy. Automakers’ profits are getting squeezed by tariffs. A subprime auto lender recently collapsed, and some car retailers are warning that consumers are pulling back.

CarMax, the biggest seller of used cars, said Thursday that its sales and profit plunged in the latest quarter. The company’s results, which sent its stock tumbling 20%, is the latest in a series of unsettling developments in an industry under strain from President Trump’s tariffs and carmakers’ recalibration of expensive electrification strategies.

“The consumer has been distressed for a little while. I think there’s some angst,” CarMax Chief Executive Bill Nash told analysts on a call Thursday. Consumers with better credit profiles “seem to be sitting on the sidelines,” Nash said.

Ford said this week it was offering lower interest rates to buyers with the weakest acceptable credit histories as it tries to unload unsold F-150 pickups, its bestselling model. Honda said it was scrapping an electric Acura SUV after just one model year. Other brands are offering steep discounts on EVs to capture buyers before a federal tax credit expires next week.

https://www.msn.com/en-us/money/markets/auto-industry-is-flashing-a-warning-sign-on-u-s-economy/ar-AA1NiiRd