The Auto Market is Normalizing for 2024
If you’re looking to upgrade into a new Cadillac this year, you may be shopping at just the right time. Cox Automotive anticipates a return to normalcy in the American auto market in 2024, marking the "best year for car buyers since the pandemic," according to its Forecast: 2024 report. The forecast projects stability across various auto market metrics, signaling a shift from a seller's market to a buyer's market.
Key factors contributing to this normalization include a significant increase in production levels, with an estimated three million vehicles expected on dealership lots compared to the chip shortage period's one million. You may have begun to notice this change already, with more inventory available on our lot than in the previous years. Overall sales are predicted to grow by approximately 2 percent, reaching 15.6 million vehicles in 2024.
The improved inventory is anticipated to help control prices, keeping incentives and discounts at elevated levels. Used vehicle sales are expected to outpace new vehicle sales by a ratio of two to one, reaching a forecast of 36.2 million for 2024. While certified pre-owned vehicle supply is limited, sales are projected to increase by 3 percent year-over-year to 2.7 million.
Cox analysts foresee continued growth in the electric vehicle (EV) market, dubbing 2024 as the "Year of More" – more models, incentives, discounting, advertising, and sales muscle. The EV and hybrid market is predicted to represent about 24 percent of the auto market, with EV leasing on the rise and a rapidly growing used electric vehicle market.
Despite slow wage growth, higher interest rates, and a weakening labor market, all economic indicators point towards more affordable vehicles for consumers. The forecast brings a sense of stability, replacing the chaotic fluctuations and constrained availability experienced in the past four years.
While the outlook is cautiously optimistic, Jonathan Smoke, Chief Economist at Cox, emphasizes that the auto industry has faced unprecedented chaos in recent years, making it challenging to predict future developments. Despite the uncertainties, the forecast signals a positive shift in the auto market landscape for 2024.
Key factors contributing to this normalization include a significant increase in production levels, with an estimated three million vehicles expected on dealership lots compared to the chip shortage period's one million. You may have begun to notice this change already, with more inventory available on our lot than in the previous years. Overall sales are predicted to grow by approximately 2 percent, reaching 15.6 million vehicles in 2024.
The improved inventory is anticipated to help control prices, keeping incentives and discounts at elevated levels. Used vehicle sales are expected to outpace new vehicle sales by a ratio of two to one, reaching a forecast of 36.2 million for 2024. While certified pre-owned vehicle supply is limited, sales are projected to increase by 3 percent year-over-year to 2.7 million.
Cox analysts foresee continued growth in the electric vehicle (EV) market, dubbing 2024 as the "Year of More" – more models, incentives, discounting, advertising, and sales muscle. The EV and hybrid market is predicted to represent about 24 percent of the auto market, with EV leasing on the rise and a rapidly growing used electric vehicle market.
Despite slow wage growth, higher interest rates, and a weakening labor market, all economic indicators point towards more affordable vehicles for consumers. The forecast brings a sense of stability, replacing the chaotic fluctuations and constrained availability experienced in the past four years.
While the outlook is cautiously optimistic, Jonathan Smoke, Chief Economist at Cox, emphasizes that the auto industry has faced unprecedented chaos in recent years, making it challenging to predict future developments. Despite the uncertainties, the forecast signals a positive shift in the auto market landscape for 2024.