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Despite rising interest rates on new-vehicle loans and a strike by the United Auto Workers against the major domestic automakers, sales volumes in September are forecast to reach nearly 1.3 million, an increase of more than 13% from 2022.<\/p>\n
Photo: Pexels<\/p>\n
The U.S. auto industry’s robust year-over-year sales recovery continued in the third quarter, according to a forecast released on Sept. 26 from Cox Automotive.<\/p>\n
Despite rising interest rates on new-vehicle loans and a strike by the United Auto Workers against the major domestic automakers, sales volumes in September are forecast to reach nearly 1.3 million, an increase of more than 13% from 2022. Sales in Q3 are expected to surpass 3.9 million, a jump of more than 15% from the same timeframe one year ago.<\/p>\n
“As the first three quarters of 2023 come to a close, ‘pleasantly surprised’ may be the sentiment of many auto analysts,” said Cox Automotive senior economist Charlie Chesbrough in a Sept. 27 news release. “The market has faced high interest rates, real affordability issues, and ongoing inflation, which could have led to large declines in vehicle sales. However, pent-up demand has been fueling the vehicle market this year. Consumers, and even moreso large fleets, have become buyers as inventory improves. Year-over-year sales gains have been surprising indeed.”<\/p>\n
Related News:<\/strong> In the final month of Q3, the September seasonally adjusted sales pace, or SAAR, is expected to finish near 15.5 million. This is a modest increase from the 15 million level recorded in August and closer to the 15.7 million pace from July. In terms of volume, September’s sales are expected to show a more than 13% gain over last year’s supply-constrained market.<\/p>\n Sales volume, however, is forecast to be lower by 4% compared to last month, mainly due to fewer selling days. September has 26 selling days, one less than August.<\/p>\n Graphic: Cox Automotive<\/p>\n As Q3 closes out, industry-wide inventory levels are up more than 63%; inventory volume is above 2 million units, an increase of over 800,000 from year-earlier levels. Days’ supply is up 33%. Sales incentives have increased notably from the start of the year as inventory builds, enticing more consumers into the market.<\/p>\n “The market’s success this year, however, has not been a retail success story,” Chesbrough added. “According to our analysis, the market has enjoyed large increases in rental and commercial fleet sales – up 62% and 40% year to date, respectively.”<\/p>\n During the recent new-vehicle inventory shortage, these channels had been starved of inventory. However, that has been changing in 2023, and fleet sales have been rising.<\/p>\n General Motors will continue to be the industry leader in sales volume in 2023, with year-to-date sales forecast to be higher by nearly 19% through Q3. The other large players, including Toyota, Ford and Stellantis, are expected to underperform the industry through the first nine months.<\/p>\n In Q3, Honda and Nissan are forecast to beat the industry widely, with year-over-year (YOY) increases of 49% and 36%, respectively. Tesla is also expected to post a positive Q3 performance, with sales up more than 31%. Tesla sales performance has been enhanced by price cuts of nearly 20% year over year.<\/p>\n Graphic: Cox Automotive<\/p>\n All percentages are based on raw volume, not daily selling rate. There were 77 selling days in Q3 2022 and 78 in Q3 2023.<\/p>\n Related News:<\/strong> As the market enters the final quarter of 2023, the Cox Automotive Industry Insights team has increased its full-year new-vehicle sales forecast to between 15.3 and 15.4 million units, up from the forecast of 15 million at the end of the first half. Retail new-vehicle sales are forecast to end the year up 7% compared to 2022; fleet sales are forecast to increase by 40%.<\/p>\n “In the auto industry right now, interest rates are public enemy No. 1 – the leading factor holding back business,” said Cox Automotive chief economist Jonathan Smoke. “Limited inventory was the leading factor one year ago, but now it’s interest rates, the economy and credit availability, which all make affordability more challenging. Ultimately, these are not good signs for demand continuing to be strong or improving in the fourth quarter.”<\/p>\n Smoke added, “The UAW strike is clearly a major factor that, should it persist, could reverse gains the industry has made on inventory. The “Stand Up” tactic by the UAW has so far minimized the initial disruption, but the approach could enable a much longer disruption than has been possible historically. So far, the impact has been negligible.”<\/p>\n
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