U.S. New Car Sales Next Year Positive Signs: Forecasts Indicate a Marginal Climb 2024

Positive Signs: Forecasts Indicate a Marginal Climb in U.S. New Car Sales Next Year 2024

Key Notes

• Expected Increase in U.S. Car Sales: Forecasts indicate a projected rise in new car sales in the United States for the upcoming year, with estimates ranging from 1% to 4% year-over-year growth.

• This follows challenges faced by the automotive industry due to the coronavirus pandemic and supply chain disruptions since 2020.

• Anticipated Impact on Affordability: Even a small increase in U.S. car sales is viewed positively for consumers and the economy. The surge in production could help alleviate concerns related to affordability, which have been influenced by factors such as inflation, high-interest rates, and record high new vehicle prices.

• Market Dynamics and Pricing Shifts: Experts, including Jessica Caldwell from Edmunds, suggest that the pricing power for automakers has peaked as improved inventory levels have led to increased incentives.

• While increased sales are beneficial, lower prices and rising incentives may present headwinds for automakers and’ dealers that have enjoyed record profits in recent years.

• Considerations for Automakers in 2024:In the coming year, automakers face decisions about whether they are content with the newly established supply-demand equilibrium or if they are willing to push sales volumes closer to pre-pandemic norms.

• The industry is navigating a complex landscape, balancing increased sales with potential challenges such as lower prices and rising incentives.

Sales of new cars in the United States are expected to go up a bit next year. This is because the car industry is trying to get back to normal after facing challenges from the coronavirus and supply chain issues since 2020.

Experts who predict trends in the car industry are saying that there might be an increase of 1% to 4% compared to the previous year. This could mean around 15.6 million to 16.1 million new vehicles sold.

If this happens, it would be the highest number since 2019 when more than 17 million new cars and trucks were sold in the country.

Since 2019, the car industry has been dealing with problems in making cars and getting the parts needed to build them. This was caused by the global health crisis, and in 2022, the number of vehicles sold was less than 14 million, which is the lowest in over ten years.

Even a small increase in the number of cars sold could be good for people and the economy. It means more cars are being made, which could help with concerns about prices going up due to inflation, high-interest rates, and the cost of new vehicles being very high.

One expert, Jessica Caldwell, who works for a company called Edmunds, thinks that the power automakers have to decide the prices for new cars has reached its highest point. This is because there are more cars available now, and this has led to companies offering more deals to attract buyers.

While it’s good for companies to sell more cars, lower prices and more deals might make it harder for them to make as much money as before.

This could be a challenge for companies and dealers who have been making a lot of profit in recent years. Jessica Caldwell also mentioned that in 2024, companies will need to decide if they are okay with selling fewer cars or if they want to try and sell as many as they did before the pandemic.

The expected growth in the United States is different from the global forecast, which says that car sales around the world will increase by about 2.8%.

If car sales in the U.S. go up next year, it would be the first time they have increased in a row since 2015-16.

Source – https://www.ev-volumes.com/ 

Different experts have different predictions. One group, S&P Global Mobility, thinks that the number of cars sold in the U.S. will reach 15.9 million in 2024, which is about 2% more than what they predict for 2023.

Another group, GlobalData, which owns LMC Automotive, expects nearly a 4% increase in new car sales in the U.S., reaching 16.1 million units.

Edmunds predicts that around 15.7 million new cars and trucks will be sold in 2024, which is about 1% more than their estimate for 2023.

On the more conservative side, Cox Automotive expects 15.6 million vehicle sales, mostly driven by an increase in fleet or commercial sales. Retail sales are expected to stay mostly the same, according to Cox Automotive.

Overall, even if there is an increase, some experts think that growth might be slow in 2024. They say it’s more normal compared to the challenges faced in the past three years.

FAQ

1. Why are new car sales in the U.S. expected to increase slightly next year?
– The expectation for a slight increase in new car sales is attributed to the automotive industry’s efforts to recover from challenges posed by the coronavirus pandemic and supply chain disruptions since 2020.

2. How much is the projected year-over-year increase in U.S. new car sales for the upcoming year?
– Forecasts from leading automotive data firms suggest a year-over-year increase of between 1% and 4%, estimating approximately 15.6 million to 16.1 million vehicles sold.

3. What factors have affected the automotive industry since 2019, and how did it impact car sales in 2022?
– The auto industry faced production and supply chain issues stemming from the global Covid health crisis, resulting in sales of fewer than 14 million vehicles in 2022, the lowest in over a decade.

4. Why could a small increase in U.S. car sales be beneficial for consumers and the economy?
– An uptick in car sales means more vehicles are being produced, potentially addressing concerns related to affordability amid inflation, high-interest rates, and record high new vehicle prices.

5. How do experts anticipate the dynamics of the automotive market in 2024, and what considerations are automakers weighing?
– Experts suggest that while increased sales are positive, lower prices and rising incentives may pose challenges for automakers and dealers who have seen record profits. Automakers are expected to consider whether they are content with the current supply-demand balance or if they aim to approach sales volumes closer to pre-pandemic levels.

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