“Our market continues to be one of diverging stories,” said Cox Automotive Chief Economist Jonathan Smoke. “While the macro view is one of growth, ‘actual experience may vary.’ January is typically a low-volume sales month, and there were no shortages of sales challenges last month – from extreme cold over much of the market to major fire disruptions in Southern California. Consumer confidence also declined more than expected in January and was lower than in January 2024, the first yearly decline since September. All factors considered, the positive sales performance in January was a good sign for the market,” Smoke said.

Executive Summary

• December was particularly strong, and the January sales pace of near 15.6 million, slightly below the forecast of 15.8 million, was the strongest since 2021.
• How long will the current momentum hold? Cox Automotive is optimistic in the near term.
• New-vehicle inventory is relatively healthy, and major automakers have turned up the sales incentives.
• More importantly, shoppers are likely being influenced by a real concern that prices in the future will be higher, not lower – red lights are flashing with all the talk of higher tariffs, the slashing of government-backed EV incentives, and the potential return of inflation.
• For in-market buyers, there is little incentive to wait and find out.
• Cox Automotive is forecasting total new-vehicle sales in 2025 to reach 16.3 million, up from 16 million in 2024. Another year of slow growth despite an uncertain road ahead.