In November, the United States anticipates a surge in new vehicle sales, marking a 10.2% increase from the previous year, according to a report by industry consultants J.D. Power and GlobalData. This growth is attributed to robust demand for the latest models and an improvement in inventories, signaling a positive trend in the automotive market.
Thomas King, president of the data and analytics division at J.D. Power, highlights that the key driver behind this sales uptick is the enhanced availability of vehicles. Despite a nearly six-week work stoppage by the UAW (United Automobile Workers), retail inventory levels are projected to rise by 7.5% from the previous month and an impressive 43.7% compared to the same period last year.
However, this influx of inventory has contributed to a 1.9% year-on-year decline in transaction prices. The average price of new retail vehicles now stands at $45,332. Thomas King notes that the surge in new-vehicle supply and increased interest rates have resulted in diminishing per-unit dealer profits, although they still surpass pre-pandemic levels.
J.D. Power and GlobalData have also adjusted their annual forecast for global light-vehicle sales, predicting a total of 89.3 million units, reflecting a substantial 10% increase from the previous year. This optimistic outlook is driven by strong demand in China.
Looking ahead to 2024, the forecast remains steady at 92.3 million units, representing a 3% growth from the expected figures in 2023. Jeff Schuster, Executive VP at GlobalData, suggests that the market might be approaching the conclusion of the pent-up demand resulting from the pandemic, unless there is a noticeable reduction in transaction prices globally. Despite potential challenges, the automotive industry appears resilient, demonstrating its ability to adapt to changing conditions and sustain growth.
Source: Reuters
