As we approach the new year, automotive data provider S&P Global Mobility has forecasted an upswing in global new light vehicle sales. It has estimated a sale of 88.3 million new vehicles worldwide in 2024, marking a jump of 2.8 per cent year-over-year. The boost in sales has been predicted on the back of the recovery of the automotive industry and momentum in supply chain and consumer demand. The lingering pent-up consumer demand has provided major thrust to auto sales in 2023 and is expected to continue doing so in 2024.
Headwinds for 2024
While prospects look good for 2024, S&P remains wary on recovery prospects due to elevated vehicle pricing alongside challenging credit and lending conditions. There is also concern regarding the impact of ongoing electrification efforts on consumer behavior. The complete forecast outlook incorporates parameters such as stickier interest rates, improving supply chains, affordability squeeze, lofty new vehicle prices, patchy consumer confidence, energy price/supply concerns, auto lending risks, and ongoing electrification growing pains.
Full-year projection for 2023
For 2023, the full-year global light vehicle sales is projected to reach nearly 86.0 million units, marking an increase of 8.9% over 2022 levels, thanks to new auto demand benefiting from ongoing output gains from restocking inventories and normalizing of supply chains.
Production outlook
S&P Global Mobility has predicted that global light vehicle production in 2023 is expected to finish at 89.8 million units – an improvement of 9% over 2022 levels that exceeds expectations in several regions. Buoyed by major gains in mainland China and India, the auto production levels mark a return to pre-pandemic levels on a global basis.
As for 2024, the agency sticks to a general production outlook that is more towards the traditional demand-driven model. With inventories reaching equilibrium in many markets, global production growth is expected to slip into a mild reverse as the industry navigates recovery after a tumultuous several years.
For 2024, light vehicle production levels are expected to decline by 0.4%, to 89.4 million units. “Vehicle output levels are flirting with the top of the current cycle, with faster-than-expected inventory restocking potentially colliding with real-world consumer demand levels,” said Mark Fulthorpe, executive director of global light vehicle forecasting for S&P Global Mobility.