Cox Automotive said today that it is forecasting that balance will reappear in the US auto market during 2024. This should be better for American consumers and fleet buyers who will find more choices, better deals, and better access to online buying tools. Cox predicts that 2024 will be the best year for car buyers since the pandemic.
“Our research suggests that Americans are putting more emphasis on buying/owning personal transportation, in contrast to 2018 and 2019, when consumers put a higher value on access to transportation,” said Jonathan Smoke Cox Automotive Chief Economist. “And after tumbling in 2021 and 2022, satisfaction with the car buying process is expected to improve in the year ahead, thanks in part to better inventory and the return of discounting, but also from improved processes at the dealership that save time and make car buying more efficient.”
However, Cox said that sales growth will be constrained and weak in 2024, albeit a bit more normal compared to the bedlam of the past three years. “As an economist, headline-making swings in economic trends are always interesting to see and analyze, but such turbulence is rarely good news for business over the longer term. Yes, we will be watching the political climate, hoping for a quick solution to the wars in Gaza and Ukraine, seeing how our own presidential election plays out, and monitoring the Fed’s actions closely, but from our vantage point today – and barring any new black swan events – the forecast is for a fairly normal automotive market in 2024. That might not make headlines, but it should be a welcome relief for everyone involved,” said Smoke.
The Cox Automotive team now expects new-vehicle sales in the US to increase less than 2%, finishing at 15.6 million sales in 2024. Retail new-vehicle sales will be mostly flat and fleet sales should recover from an end-of-2023 lull and continue to improve.
The EV Market?
During 2024, the Cox Automotive team is expecting that the industry will fully come to terms with the fact that the average consumer has to be sold on the merits of going electric, and many won’t be easily convinced. “But with more models, more incentives, more discounting, more advertising, and more sales muscle, we still believe more sales will follow, with EV sales in the US in 2024 topping the more than 1-million-unit record set in 2023, and accounting for more than 10% of total sales. Hybrid models will add further to mix, pushing the share of electrified vehicles -EVs, Plug-in Hybrids, and Hybrids – to near 24% of the market in 2024,” Cox said.
However, fewer EVs may be eligible for the Inflation Reduction Act tax credits because of changing rules. Nonetheless Cox said federal incentives will continue to encourage consumers to buy electric, and leasing of electric vehicles should continue to increase as well, growing from ~20% to 25%, an increase of 5 percentage points.”
“Market leader Tesla’s share of total EV sales will continue to decline as the industry pioneer will grow volume but lose share. And the nascent used-EV market will continue to be the fastest-growing product segment in the wholesale/used vehicle market. There will be more used EVs in the market, very much aligned with our expectations that 2024 will be the Year of More when it comes to EVs,” Cox said.
Forecast is Finally Normal for 2024 US Auto Market
Cox Automotive said today that it is forecasting that balance will reappear in the US auto market during 2024. This should be better for American consumers and fleet buyers who will find more choices, better deals, and better access to online buying tools. Cox predicts that 2024 will be the best year for car buyers since the pandemic.
“Our research suggests that Americans are putting more emphasis on buying/owning personal transportation, in contrast to 2018 and 2019, when consumers put a higher value on access to transportation,” said Jonathan Smoke Cox Automotive Chief Economist. “And after tumbling in 2021 and 2022, satisfaction with the car buying process is expected to improve in the year ahead, thanks in part to better inventory and the return of discounting, but also from improved processes at the dealership that save time and make car buying more efficient.”
However, Cox said that sales growth will be constrained and weak in 2024, albeit a bit more normal compared to the bedlam of the past three years. “As an economist, headline-making swings in economic trends are always interesting to see and analyze, but such turbulence is rarely good news for business over the longer term. Yes, we will be watching the political climate, hoping for a quick solution to the wars in Gaza and Ukraine, seeing how our own presidential election plays out, and monitoring the Fed’s actions closely, but from our vantage point today – and barring any new black swan events – the forecast is for a fairly normal automotive market in 2024. That might not make headlines, but it should be a welcome relief for everyone involved,” said Smoke.
The Cox Automotive team now expects new-vehicle sales in the US to increase less than 2%, finishing at 15.6 million sales in 2024. Retail new-vehicle sales will be mostly flat and fleet sales should recover from an end-of-2023 lull and continue to improve.
The EV Market?
During 2024, the Cox Automotive team is expecting that the industry will fully come to terms with the fact that the average consumer has to be sold on the merits of going electric, and many won’t be easily convinced. “But with more models, more incentives, more discounting, more advertising, and more sales muscle, we still believe more sales will follow, with EV sales in the US in 2024 topping the more than 1-million-unit record set in 2023, and accounting for more than 10% of total sales. Hybrid models will add further to mix, pushing the share of electrified vehicles -EVs, Plug-in Hybrids, and Hybrids – to near 24% of the market in 2024,” Cox said.
However, fewer EVs may be eligible for the Inflation Reduction Act tax credits because of changing rules. Nonetheless Cox said federal incentives will continue to encourage consumers to buy electric, and leasing of electric vehicles should continue to increase as well, growing from ~20% to 25%, an increase of 5 percentage points.”
“Market leader Tesla’s share of total EV sales will continue to decline as the industry pioneer will grow volume but lose share. And the nascent used-EV market will continue to be the fastest-growing product segment in the wholesale/used vehicle market. There will be more used EVs in the market, very much aligned with our expectations that 2024 will be the Year of More when it comes to EVs,” Cox said.