January Auto Sales Projected to Show Slowdown

While the forecasted number is an improvement over January 2023, it represents a slower pace than December 2023.

January-2024-expected-new-car-sales
S&P Global Mobility predicts about 1.09 million new vehicles will be sold by the end of January. Image via Shutterstock.

In January, U.S. auto sales are expected to have experienced a deceleration, estimated to fall to a seasonally adjusted annual rate (SAAR) of 15.2 million units, according to the latest data from S&P Global Mobility.

Despite this slowdown, January's figures---an estimated 1.09 million vehicles---still represent an improvement compared to the same period last year. However, the fluctuation indicates a potential trend of volatility in the auto market for the upcoming year.

The change in pace compared to December 2023 is attributed to several factors, including the aftermath of strong sales in December and the impact of inclement weather conditions.

The S&P Global Mobility outlook for 2024 projects sustained but more moderate growth levels for light vehicle sales. Production levels are expected to continue to develop, especially early in the year as some automakers look to continue to restock in wake of production shutdowns late in 2023 and decent December 2023 sales volume. The advancing production levels set the stage for incentives and inventory to continue to develop, potentially enticing new vehicle buyers who remained on the sidelines due to higher interest rates. S&P Global Mobility projects calendar-year 2024 volume of 15.94 million units, a 3% increase from the 2023 tally.

"Auto consumers continue to be impacted by an uncertain purchase environment," said Chris Hopson, principal analyst at S&P Global Mobility. "While positive developments regarding mildly retreating vehicle prices, rising inventory and incentive levels bode well, interest rates remain high and economic headwinds remain. A volatile purchase environment for auto consumers will continue to dictate monthly sales levels."

The report also noted a rise in dealer advertised vehicle inventories. Matt Trommer, associate director of market reporting at S&P Global Mobility, said new vehicle dealer inventory listings in the U.S. market have increased to 2.45 million units at the end of December, a slight 0.6% rise from November and a 53% year-over-year increase.

Additionally, the average advertised discount on vehicle listings has seen a rise, reaching $3,030 by the end of December, up 10.5% from the previous month.

Looking at battery-electric vehicle (BEV) sales, while some month-to-month volatility is anticipated, the January BEV share is expected to reach 8.0%, maintaining a similar level to the previous month. This steadiness occurs as automakers, dealers and consumers adjust to changes in IRA federal tax credits at the beginning of the new year. The BEV share is expected to grow in the coming periods, especially with the anticipated market introductions of models like the Chevrolet Equinox EV, Honda Prologue and Fiat 500e in the first half of 2024.

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