A return to normal conditions in the American auto market is expected during 2024 according to a new forecast from Cox Automotive, with the upcoming twelve months “expected to be the best year for car buyers since the pandemic.”
The Forecast: 2024 report from Cox predicts stability for 2024 in most auto market measures, while noting the seller’s market of the past several years is rapidly giving place to a buyer’s market.
A major factor in the predicted normalization of the auto market is a return to robust production levels. Rather than roughly a million vehicles in dealer inventory at any given time during the period of the chip shortage, 2024 should see about three million vehicles on dealership lots. Overall sales should grow about 2 percent to 15.6 million vehicles for the calendar year.
The increased supply should help to keep prices under control despite demand, with incentives and discounts expected to remain high. Used vehicle sales will outnumber new vehicle sales by around two to one at an expected 36.2 million forecast for 2024. Certified pre-owned vehicle supply is depleted, so only about 2.7 million of those sales will be certified, though this is up 3 percent year-over-year.
Cox analysts believe the electric vehicle (EV) market will also continue its growth, though consumers are also likely to continue being wary of the new technology. More than a million EVs were sold during calendar 2023, and sales levels should notch even higher during 2024, making the upcoming 12 months what the firm calls “the Year of More – more models, more incentives, more discounting, more advertising, and more sales muscle.”
When EVs are added to hybrids, the electric or partially electric vehicles should make up about 24 percent of the auto market in 2024. EV leasing should increase and the used electric vehicle market is expected to grow rapidly.
Although wages will grow only slowly in 2024, combined with high interest rates and a weakening labor market, all economic factors should still trend toward more affordable vehicles for ordinary Americans. Stability should replace wild price swings and constrained availability.
While the forecast is cautiously upbeat, Jonathon Smoke, the chief economist at Cox, cautions that the “past four years have been chaotic, even by auto industry standards.” He added that the chaos “shifted many normal seasonal patterns out of whack, which adds to the difficulty of forecasting what comes next.”
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Comments
yes thank you biden for not paying 20k over msrp anymore. praise biden for having discounts again
I hope this is true, but I’ll believe it when I see it. Automakers all became arrogant in the last few years and there’s no end to the tricks up their sleeves. Take December, for example, a traditionally high sales month. Automakers knew this and reduced incentives, resulting in a choppy sales month. Asking prices right now aren’t that different from a year ago. And way too high.
Shady dealers will still try to put the screws to uninformed buyers.
NADA opposes common sense regulations.
Donations to politicians trumps consumer protection.
If the American people wouldn’t be so “impulsive” when buying and just THINK before purchasing, the auto makers and dealerships wouldn’t have the upper hand on the consumers!
They have gotten away with this the past 3 years because of this reason! Now with interest rates climbing, insane monthly car payments, ridiculous grocery bills, gas prices still high, it is catching up with many of these impulsive buyers!
Those who can be patient and continue to be patient, it will turn around, and these greedy dealerships/automakers are going to be suffering!! Discounts are coming…
I was thinking the same thing, that people are stupid to pay these high prices. Does anyone really need a new car THAT bad? People are dumb.
“Normal”
Average new vehicle price in 2019 was around $37,000 in Canada. Now it’s $67,000. Ya it’s great the inventory has returned and incentives are increasing but the vehicles are still out of reach for most people. They’re too damned expensive even with incentives because you pay on the back end with 6-9% interest rates. The mortgage and auto sector are closely related. Fixed rate mortgages are coming due and some are seeing increases of $1000/month or more. Perhaps a decent 2024 is in order but 2025 will be bad if interest rates don’t drop.