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U.S. Auto Sales are Projected to Reach Highest Levels Since 2019

U.S. vehicle sales are expected to experience a significant increase in 2024, approaching the levels seen in 2019. This growth will be driven by improved inventory availability, declining financing costs, and enhanced incentives for consumers. Cox Automotive, S&P Global Mobility, and Edmunds anticipate new light-duty vehicle sales for 2024 will swell by a mere 2.5 percent or less reaching around 16.2 million units, from some 15.9 to 16 million in 2023. 

The sales growth can be contributed to the normalization, gradually coming back of vehicle inventories that was hampered by supply chain troubles and the COVID-19 pandemic, combined with decreased interest rates and easier conditions on loans, which is relaxing cost pressures for buyers. According to Edmunds’ head of insights Jessica Caldwell it still comes as a challenge to consumers in dealing with their financial struggles. However, it seems it’s becoming less painful compared to during the early part of the year. 

A significant growth area would likely be entry-level and more affordable vehicles that the industry has seen be in demand due to its traversing of years with high prices and limited inventory. According to Edmunds, a slight decline is reported for 2024 average transaction prices of new vehicles which are priced at $47,465 which marks an 0.8% decrease from 2023 and is nearly four thousand dollars above 2019’s $37,310 average. 

Sales in the electric car market are also expected to move upwards and are likely reach new highs in 2024, with all electric cars hitting a record high sale of about 1.3 million units or nearly 8% market share. Analysts predict that EVs, including hybrids and plug-in hybrids, will continue to increase their share in the coming years, and Cox predicts that 25% of all new vehicle sales will be electrified by 2025. 

Although some challenges in the industry might have arisen-for example, federal tax credits for EV buyers are somewhat reduced but the industry is upbeat about its further growth. However, analysts also caution that political developments, including the introduction of tariffs by President-elect Donald Trump, could cause disruptions in the market, especially in terms of vehicle production from Canada and Mexico. Overall, this is a 2024 forecast representing an industry healing from those disruptions of the last few years, improvement for consumers and their automakers alike-even as pricing pressure will continue challenging the industry’s ability to be profitable.