New car sales will improve on a monthly and yearly basis, according to Cox Automotive, following a late-season demand surge in December.
Based on the sales pace, Cox Automotive believes 1.36 million new vehicles were sold throughout the month, an increase of 6.2% from the prior year. New car inventory also showed signs of improvement, hitting 2.56 million units before New Year’s Day, nearly 1 million more than in December 2022. Days’ supply averaged 71 days, up from November 2023’s 60 days and December 2022’s 54.
With 2023 now concluded, analysts now expect to record a full-year new car sales total of 15.5 million units when automakers publish their numbers for December in the coming days. That number would represent an increase of roughly 11.6% from 13.9 million in 2022 but remains below pre-pandemic averages.
Charlie Chesbrough, Cox Automotive’s senior economist, noted that “December is generally a strong month for new-vehicle sales…and [2023] will be no exception.” While dealers have felt increasingly pessimistic toward the auto market in the fourth quarter, it appears the year still ended much as it began: better than expected.
Nevertheless, the retail automotive sector will still face challenges in 2024, especially in terms of profit. If last year was defined by the new car market’s surprising resilience, then this year will be defined by the return of normalcy and pre-pandemic sales trends. Dealers will need to adopt aggressive strategies and implement cutting-edge tools to compete for buyers as manufacturers re-introduce incentives. Doing so will help them slow the pace of falling profit margins and prepare them for whatever the New Year has in store.
