NADA Economist Predicts 14.6 Million Light Vehicle Sales

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New light-vehicle sales increased for the seventh straight month in February 2023 compared with the year before. February’s SAAR (seasonally adjusted annual selling rate) of 14.9 million units was up 8.6% from February 2022. “This boost was likely aided by higher inventory and incentive spending,” Patrick Manzi NADA Chief Economist said today. Fleet sales also rose, jumping 39% from February 2022, according to Wards Intelligence. (autoinformed.com on:US Light Vehicle Sales Up in February Amid Uncertainty)

J.D. Power, forecast average incentive spending per unit to total $1335 in February, up 4.7% compared with a year ago. “But even though incentive spending has now increased for four straight months, there continues to be a lack of incentives directed toward leasing.

“Power predicts that leasing will account for just 18% of retail sales in February, down significantly from the pre-pandemic level of 31% in February 2019. Monthly payments continue to increase due to rising inter est rates and elevated new-vehicle prices. The average monthly payment in February, says J.D. Power, should reach $722, up $59 year over year. The average interest rate on a new-vehicle finance contract in February is expected to be 6.8%—an increase of 252 basis points over last year,” Manzi noted.

“Looking ahead, we believe that vehicle production will show continued improvement in March. Wards Intelligence expects that 2023 Q1 North American light-vehicle production will grow by 7.3% compared with the first quarter of 2022. This should be good news for continued inventory growth throughout the year. We believe that with more inventory available, new light-vehicle sales will increase in 2023. Our full-year forecast is 14.6 million units,” said Manzi.