Cox Forecasts Strong New-Vehicle Sales

By Staff Writer August 24, 2023 559

New-vehicle sales, when announced next week by automakers, are expected to show big gains once again over last year but a slight decline in the sales pace from last month. A key reason for the volume gain is new-vehicle inventory hitting its highest level in more than two years. Stronger fleet sales are also expected to support higher sales volumes.

The August seasonally adjusted annual rate, or SAAR, is expected to finish near 15.4 million. This is a mild decrease in sales pace from July’s 15.7 million level. Although the pace is expected to dip slightly from last month, much of this decline can be attributed to statistical adjustments as this month has one more selling day than August 2022 and two more than last month.

Compared to August 2022, August’s sales volume is expected to show nearly a 19% gain over last year’s supply-limited market. In addition, new-vehicle sales are expected to rise more than 3% from last month. Pent-up demand from consumers and businesses – especially in the form of rental fleet sales – continues to be fulfilled as new-vehicle supply and pricing improves.

According to Charlie Chesbrough, senior economist at Cox Automotive: “The supply recovery continues to improve across the country, and this is leading to the market’s sales gains this year. In addition, the return of supply is also bringing back more discounting from manufacturers. But rising interest rates, and their impact on affordability, remain strong headwinds against a more robust vehicle market.”

The new-vehicle market has seen improving or stable affordability and sales strength so far this year. However, high interest rates and still-high prices will likely create some slowdown in the second half of the year. In addition, while some pent-up demand has been fulfilled, higher incentives and more fleet sales should continue to provide support.

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Last modified on Thursday, 31 August 2023 10:14