Sales of New Vehicles in the U.S. Expected to Increase in 2024
According to forecasts from leading automotive data firms, sales of new vehicles in the U.S. are expected to increase slightly in 2024. This comes as the automotive industry continues to recover from the impact of the coronavirus pandemic and supply chain problems that have persisted since 2020.
Expected Increase in Sales
The forecasts predict a year-over-year increase of between 1% and 4%, resulting in approximately 15.6 million to 16.1 million vehicles sold. If achieved, these sales figures would be the highest since 2019 when over 17 million new cars and trucks were sold domestically.
Since 2019, the auto industry has faced challenges in production and supply chain due to the global health crisis caused by Covid-19. As a result, sales dropped to less than 14 million vehicles in 2022, the lowest in over a decade.
An increase in U.S. vehicle sales in 2024 would have positive implications for consumers and the economy. It would indicate increased production and potentially alleviate concerns about vehicle affordability amidst inflation, high interest rates, and record-high new vehicle prices.
“While the year ahead holds the promise of further increased inventory and enticing deals that consumers have eagerly awaited, 2024’s high interest rates are expected to linger, provoking conflicting market dynamics,” said Jessica Caldwell, Edmunds’ head of insights.
Pricing Power and Incentives
Edmunds believes that automakers’ pricing power for new vehicles has peaked as improved inventory levels have led to the reintroduction of incentives in the market. While increased sales are positive for investors, lower prices and rising incentives are expected to pose challenges for automakers and dealers who have recently enjoyed record profits.
“Automakers specifically will weigh one other key consideration in 2024: Are they satisfied with this newly established supply-demand equilibrium, or are they willing and able to push sales volumes closer to prepandemic norms?” Caldwell said.
Global Comparison
The expected growth in U.S. vehicle sales in 2024 is in line with a forecasted 2.8% year-over-year increase in global auto sales by S&P Global Mobility.
“2024 is expected to be another year of cagey recovery, with the auto industry moving beyond clear supply-side risks, into a murkier macro-led demand environment,” said Colin Couchman, executive director of global light vehicle forecasting at S&P Global Mobility.
This potential increase in U.S. sales would mark the first sequential sales growth for the automotive industry since 2015-16.
Forecasts from different firms vary slightly. S&P Global Mobility expects sales to reach 15.9 million units in 2024, a 2% increase from projected sales of 15.5 million units in 2023. GlobalData, which acquired LMC Automotive, forecasts a nearly 4% increase in U.S. new vehicle sales to 16.1 million units. Edmunds expects approximately 15.7 million new cars and trucks to be sold in 2024, a 1% uptick from estimated sales in 2023.
On the lower end, Cox Automotive expects 15.6 million vehicle sales in 2024, driven largely by an increase in fleet or commercial sales. Retail sales are expected to be mostly flat.
“Overall, we are expecting sales growth to be constrained and weak in 2024 – a bit more normal compared to the chaos of the past three years,” said Jonathan Smoke, chief economist at Cox Automotive.
As the automotive industry looks towards recovery, these forecasts provide insights into the potential trajectory of vehicle sales in the U.S. in the coming year.
