Posted Saturday, Oct 21, 2023
Q3 witnessed a significant resurgence in the U.S. new-vehicle market, defying challenges such as elevated auto loan rates and a UAW strike. The quarter concluded with remarkable strength, surpassing expectations and setting a positive tone for the auto industry. Initial estimates reveal that Q3 new-vehicle sales in the U.S. outperformed Cox Automotive's forecast of 15%, amounting to 3.93 million units. This represents an encouraging increase from the 3.42 million units sold in Q3 2022.
Multiple factors contributed to this resurgence. Vastly improved inventories, increased fleet sales, and determined consumer activity in the face of elevated vehicle prices and high auto loan rates were key drivers of this remarkable performance. Several major automakers, including General Motors, Toyota, Hyundai Motor Group, and Nissan, played pivotal roles in boosting sales, reflecting robust results.
Most automakers reported substantial year-over-year sales growth, with Honda's sales surging by almost 53%, and Nissan's by more than 40%. However, Stellantis stood out as an exception, with sales volumes declining more than 1% year over year in Q3. This decline was partly attributed to the strategic approach of pursuing higher transaction prices with lower volume. Historically, Stellantis buyers have faced credit challenges and may be particularly affected by the industry's high auto loan rates.
A notable outcome of this performance is the shift in overall sales volumes, with Hyundai Motor Group – comprising Hyundai, Kia, and Genesis – poised to move ahead of Stellantis into the fourth position for 2023. This is a significant shift, as in 2019, Hyundai was seventh in the U.S. market by volume. The automotive landscape is evolving rapidly, with major automakers jockeying for positions in an ever-competitive market.
One of the standout stories of 2023 has been the recovery in new-vehicle inventory. As September began, new-vehicle inventory was 68% higher than in the previous year. This increase in inventory offers consumers greater choices and has significantly contributed to healthy sales. Cox Automotive data also indicates that higher incentives are playing a role in boosting sales. Furthermore, fleet sales, especially into rental and commercial fleets, have seen substantial increases in 2023. Rental and commercial fleet sales have surged by approximately 60% and 40% year over year, respectively.
While the data from September doesn't show a significant impact of the UAW strike on sales, this scenario may change in October and Q4 if the strike continues or expands. General Motors, with its lower inventory levels, appears to be the most exposed, while Stellantis is in a comparatively better position.
The outlook for the auto market remains positive but faces challenges as we transition into Q4. Consumer and economic factors could exert downward pressure on the sales pace, particularly on the retail side. Despite these challenges, the auto industry has demonstrated resilience and adaptability in navigating a complex landscape.
Based on the article written by COX Automotive Inc., https://www.coxautoinc.com/news/cox-automotive-forecast-september-2023-u-s-auto-sales-forecast/