Thanks to revived inventory, combined with manufacturer incentives and price cuts, U.S. new-vehicle sales are on track to surge this year by about 8% to 15 million in what could be a post-pandemic turning point, Cox Automotive says.
Based on a healthier-than-expected first half of the year, Cox increased its full-year estimate, despite the pressures of still-high prices and high interest rates. It forecasts sales in the first half of the year to be up about 12% to 7.65 million and anticipates only a “minor” slowdown in the last six months.
“We came into 2023 concerned about affordability, supply constraints, and a fragile economy,” noted Cox Automotive Chief Economist Jonathan Smoke in a press release on the updated forecast.
“But the jobs market has remained healthy, and consumers have found a way to buy new wheels. As we close the first half, the market is showing signs of being more balanced, with smaller, more predictable changes in sales and less news about big price changes. A year from now, we might look back at this point as the beginning of a return to normal.”
New-vehicle inventory is up more than 70% year-over-year this month, and days of supply has hovered around 50 days for much of the first six months, up from 35 days a year earlier, Cox said.
Fleet sales have been a big driver in the first half of the year and could be up more than 40% year-over-year and end 2023 at 2.6 million, while retail is on track to be up around 3% to end at 12.4 million.
“The resilience of vehicle buyers in the face of historic increases in interest rates has been surprising,” said Cox Automotive Senior Economist Charlie Chesbrough.
“However, maybe less surprising, but more than we expected, has been the industry’s return to old habits to move the metal. We expect that headwinds will grow in the second half of this year as credit availability and unfulfilled demand become scarcer.”
General Motors continued to be tops in U.S. new-vehicle sales in the first six months, up 17% year-over-year, followed by Toyota in second and Ford in third. Hyundai passed Stellantis to take fourth place with forecasted six-month sales up 16% year-over-year.
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