Automotive manufacturing in the United States (US) has continued to show resilience despite higher tariffs, geopolitical uncertainty and energy-price pressures, according to Perc Pineda, PhD, Chief Economist at the Plastics Industry Association.
Pineda said recent data indicated that the automotive sector remained an important contributor to U.S. economic growth, with vehicle sales, production and orders holding relatively firm despite ongoing cost pressures.
Auto and light-truck sales were estimated at a seasonally adjusted annual rate (SAAR) of 16.6 million units in June before easing to 16.3 million in July. Sales have remained above 16 million units for four consecutive months.
“This stability is notable given uncertainty surrounding tariffs, vehicle prices, interest rates, and energy costs,” Pineda said.
New-vehicle prices rose 0.5% year over year in June, while the Producer Price Index for motor vehicle manufacturing increased 1.6%. Pineda said the figures suggested tariff-related costs had so far been absorbed by manufacturers and consumers without a significant disruption to demand.
The impact was somewhat higher among parts manufacturers, with producer prices for motor vehicle parts manufacturing rising 2.1% year over year in June. Pineda noted that sustained cost increases among suppliers could eventually place additional pressure on automakers and consumers.
Manufacturing activity has nevertheless remained firm. New orders for motor vehicles and parts reached $73.1 billion in June, up from $72.1 billion in March and 10.6% higher than a year earlier. Motor vehicle assemblies also increased to an annualised 11 million units in July, their highest level since July 2023.
North American automobile and light-truck production in the United States, Mexico and Canada was up 0.7% year to date through June, according to data cited by Pineda. June production increased 2.6% year over year.
Pineda also identified interest rates as a factor that could influence future vehicle demand. Recent Federal Reserve rate cuts have reduced borrowing costs, while further reductions could provide additional support for consumers financing vehicle purchases.
However, Pineda said the industry continued to face longer-term challenges related to tariffs, global supply-chain exposure, energy costs and productivity.
“For now, the data point to resilience rather than deterioration,” Pineda said. “But sustaining that momentum will depend on how effectively automakers and suppliers manage these competing pressures.”
The automotive sector remains a significant end market for plastics, making the performance of vehicle manufacturing an important indicator for plastics manufacturers and suppliers.
Pineda said current conditions were encouraging, while affordability and production costs remained risks to monitor through the remainder of 2026.
