One full year into a new trade philosophy within the United States, automotive manufacturing in North America experienced a net contraction of 4.1 percent. However, looking at the numbers, the change feels more nuanced than an industry that is simply shrinking; it also feels like a consolidation of consumer preferences. We sampled the Automotive News North America car and truck production database and noted a drop of 650,515 units from 2024. Some manufacturers increased their manufacturing output, while most, including all major domestic brands, decreased production.

Toyota is the most obvious benefactor of uncertain economic policy. Their production climbed from 2,048,764 units to 2,241,611, an increase of 192,847 vehicles, the largest absolute gain in the dataset. While U.S. production capacity is required to maintain a competitive edge when economic policies are shifting, a dynamic lineup of internal combustion engines (ICEs), hybrid electric vehicles (HBEVs), and battery electric vehicles (BEVs) is needed to move metal at dealerships.

Toyota’s product mix aligns with what the market is absorbing. Hyundai‑Kia followed with an 81,794‑unit increase, up 8.3 percent year over year. These aren’t lucky breaks; they’re the result of disciplined platform strategy and a diversified product mix to meet an evolving demand.

Lucid Motors, though operating on a much smaller base, delivered the most dramatic percentage increase with 111.8 percent growth, adding 9,699 units. Even the “Other” category of smaller manufacturers and niche producers added 4,384 units, up 15.3 percent. Growth can also occur in ultra-luxury markets.

The declines tell a different kind of story. Stellantis absorbed the largest absolute drop: 242,547 units, a 13.7 percent decline. Tesla’s decline of 163,920 units, down 19.8 percent, can be a reflection of the ending federal tax credit for BEVs and the shift in manufacturing overseas. GM shed 108,740 units (-4.0 percent), Honda 104,360 (-6.2 percent), and Nissan 134,653 (-12.6 percent).

Even the smaller players weren’t spared. Mazda dropped 19,680 units (-6.2 percent). Mercedes‑Benz fell by 25,846 (-6.6 percent). Subaru fell 28,141 (-7.7 percent). Volvo’s 46.8 percent decline, 7,156 units, was the sharpest percentage drop in the entire dataset, which was stymied by an aging model lineup and a technical problem-ridden flagship vehicle (EX90). Rivian’s 7,192‑unit decline (-14.5 percent) fits the broader EV normalization narrative: demand is still there, but new vehicle appetite is decreasing.

The manufacturing realignment in 2025 has already reshaped reality for U.S. dealerships. With domestic brands pulling back production and several import brands surging ahead. The evolving landscape rewards dealership groups that already have historically high performers in the industry (Toyota, Hyundai, Kia, BMW). Dealers that are tied to manufacturers with declining output have faced tighter inventory, longer inventory cycles, and greater pressure to shore up front-end grosses. Across the board, dealerships will need to rely on fixed operations and a healthy used vehicle pipeline to maintain current gross levels.

Questions? We’re Here to Help.

Blue & Co. brings a combination of financial expertise, operational insight, and industry-specific advisory services that can help dealerships navigate exactly the kind of market realignment described in this article. Our approach centers on understanding a dealership’s unique pressures and opportunities, then building tailored strategies that strengthen both day-to-day performance and long-term resilience. Contact a Blue & Co. advisor today.