According to a joint forecast report by industry consultants J.D. Power and GlobalData, new vehicle sales in the United States are anticipated to witness a robust 10.2% year-on-year growth in November. This surge is attributed to sustained demand for the latest vehicle models and an improvement in inventories.
Sales growth driven by improved vehicle availability
Thomas King, President of the Data and Analytics Division at J.D. Power, stated that the growth in sales is facilitated by the enhanced availability of vehicles. Despite the almost six-week UAW work stoppage, retail inventory levels are expected to experience a 7.5% increase in November compared to the previous month, marking a significant 43.7% increase from the same period last year.
Impact on transaction prices and dealer profits
However, the increase in inventory has led to a 1.9% year-on-year decline in transaction prices, bringing the average price of new retail vehicles to USD 45,332. King noted that while the rise in new-vehicle supply and higher interest rates contributes to decreasing per-unit dealer profits, these profits still surpass pre-pandemic levels.
Global outlook for light-vehicle sales
J.D. Power and GlobalData have revised their annual forecast for global light-vehicle sales, projecting a total of 89.3 million units for 2023, reflecting a substantial 10% increase from the previous year. This positive outlook is primarily driven by strong demand in China.
Looking ahead to 2024, the forecast remains steady at 92.3 million units, indicating a 3% growth compared to 2023. Jeff Schuster, Executive VP at GlobalData, suggested that the market may be approaching the end of true pent-up demand from the pandemic unless there is a noticeable reduction in transaction prices globally.
Despite challenges such as inventory pile-up affecting transaction prices, the US automotive market continues to demonstrate resilience, with strong sales expected in November. The global market’s trajectory remains optimistic, buoyed by robust demand in key regions, particularly China.