New Car Sales Expected to Reach Highest Level Since 2019

The automotive industry in the United States is reportedly set to experience a slight increase in new car sales in 2024.

Industry analysts’ projections indicate a year-over-year growth rate ranging from 1% to 4%, with an estimated 15.6 million to 16.1 million vehicles expected to be sold, CNBC reported Thursday (Dec. 21).

This anticipated growth in new car sales would be the highest level since 2019, when over 17 million new cars and trucks were sold domestically, according to the report.

This growth comes as the industry continues to recover from the impact of the coronavirus pandemic and supply chain challenges faced since 2020, the report said. Due to these challenges, the industry saw sales of less than 14 million vehicles in 2022, the lowest in over a decade.

Jessica Caldwell, head of insights at Edmunds, highlighted conflicting market dynamics expected in 2024, according to the report. While increased inventory and enticing deals are anticipated, persistently high interest rates may pose challenges.

Edmunds believes that automakers’ pricing power has peaked, as improved inventory levels have driven incentives back into the market, the report said. This could result in lower prices for consumers but may present headwinds for automakers and dealers who have enjoyed record profits in recent years.

The projected growth in the U.S. market aligns with S&P Global Mobility’s forecast of a 2.8% year-over-year increase in global auto sales, per the report.

Colin Couchman, executive director of global light vehicle forecasting at S&P Global Mobility, suggested that 2024 will be a year of cautious recovery for the auto industry, transitioning from supply-side risks to a more uncertain macro-led demand environment, according to the report.

S&P Global Mobility expects U.S. sales to reach 15.9 million units in 2024, a 2% increase from the projected sales of 15.5 million units in 2023, the report said.

GlobalData forecasts a nearly 4% rise in U.S. new vehicle sales to 16.1 million units, per the report.

Edmunds predicts 15.7 million new cars and trucks to be sold in 2024, representing a 1% uptick from the estimated 15.5 million vehicles sold in 2023, according to the report.

However, Cox Automotive expects 15.6 million vehicle sales, primarily driven by an increase in fleet or commercial sales, while retail sales are projected to remain mostly flat, the report said. Jonathan Smoke, chief economist at Cox Automotive, suggests that sales growth in 2024 will be constrained and weak.

PYMNTS reported in October that car sales were climbing due to consumers’ need to replace vehicles that are, on average, a dozen years old. Previously, consumers had been hanging onto their existing vehicles because of the high cost of buying a new car.