New vehicle sales are projected to surge in the first quarter on the backs of improved affordability and stable consumer demand.
Edmunds predicts a total of 3,772,894 new vehicle sales in the U.S., including trucks, for the January-through-March period. While the number represents a 3.1% decline from the fourth quarter, it also signifies a 6% increase from early 2023, underscoring the rapid recovery of inventory levels over the last year. Honda and Toyota models saw the fastest turnover rates in the industry during the first quarter, with the brands carrying respective days’ supplies of 22 and 27 days, down significantly from the average of 50 days.
The two companies have seen lower supply levels than their competitors in the post-pandemic car market but are both forecast to see an approximate 20% boost in first-quarter new vehicle sales, far ahead of the industry average. Although General Motors is set to lead the industry in volume, followed by Toyota, it is expected to see a slight slowdown from the prior-year period. Ford and Hyundai Motor Group are set to take third and fourth place, respectively, with the former seeing a sales increase of 6.5% and the latter seeing a decline of 1.4%. Stellantis saw the sharpest decline in terms of share and volume, shedding 8.6% of sales and 13.8% of the market.
Cox Automotive reports that car prices have declined 5% from their peak in December 2022, following a gradual return of automaker incentives and discounts. The average transaction price over the first quarter was roughly $47,244, still higher than pre-pandemic norms. However, affordability improved to the highest point in two-and-a-half years in February, possibly explaining the first quarter’s sales improvement.
