January 2024 US auto sales feel the chill

January 2024 auto sales are expected to decelerate from the
quickening realized in December, with the pace of demand falling
back to a SAAR of 15.2 million units

With volume for the month projected at 1.09 million units,
January 2024 U.S. auto sales are estimated to translate to a sales
pace of 15.2 million units (seasonally adjusted annual rate: SAAR).
While this would be an improvement from the year-ago level, the
result reflects a potential preview to the upcoming calendar year
whereby month-to-month volatility is expected to remain in the
market. Contributors to the chill in the January sales pace include
an expected hangover from the solid closeout to sales in December
2023, combined with some inclement weather effects.

The S&P Global Mobility US auto outlook for 2024 projects
sustained, but more moderate growth levels for light vehicle sales.
We expect production levels to continue to develop, especially
early in the year as some automakers look to continue to restock in
the 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 a
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. While positive developments regarding mildly
retreating vehicle prices, rising inventory, and incentive levels
bode well, interest rates remain high, and economic headwinds
remain,” said Chris Hopson, principal analyst at S&P Global
Mobility. “A volatile purchase environment for auto consumers will
continue to dictate monthly sales levels.”

Dealer-advertised vehicle inventories continue to climb.
Available new vehicle dealer inventory listings for the US market
increased to 2.45 million units at the end of December, said Matt
Trommer, associate director of Market Reporting at S&P Global
Mobility. This is a slight 0.6% increase from November and a 53%
year-over-year increase.

“With growing inventory levels, the average advertised discount
of vehicle listings has continued to rise and by the end of
December stood at $3,030, an increase of 10.5% vs. the previous
month,” Trommer said.

Continued development of battery-electric vehicle (BEV) sales
remains an assumption in the longer-term S&P Global Mobility
light vehicle sales forecast. In the immediate term, some
month-to-month volatility is anticipated. January BEV share is
expected to reach 8.0%, similar to the month prior reading as
automakers, dealers, and consumers digest the changes to IRA
Federal tax credits to begin the new year. BEV share is expected to
advance over the next several periods, pending the rollouts of
vehicles such as the Chevrolet Equinox EV, Honda Prologue, and Fiat
500e, all scheduled for market introductions over the first half of
2024.

This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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• Source: http://www.spglobal.com/mobility/en/research-analysis/january-2024-us-auto-sales-feel-the-chill.html