According to Cox Automotive’s first quarter sales forecast, the U.S. car market has performed better than analysts expected at the end of last year.
Cox Auto estimates that sales volume will grow 5.7% compared to the same period in 2022, with sales expected to reach a total of 3.5 million units by the end of the quarter. The industry is expected to sell 1.3 million vehicles this month alone, up 2.6% from last March. The Seasonally Annual Adjusted Rate (SAAR) is predicted to reach 15 million, an increase of 6%.
The service and technology provider also expects General Motors will accumulate the most sales in Q1, finishing the period with 587,000 units. While the number is down roughly 5% from the last quarter, it places the automaker above its competitor Toyota, who was the industry’s top U.S. seller in early 2022.
Driving this growth is the return of new vehicle inventory, which Cox Auto notes is “vastly improved” from the previous year. Fleet sales have also aided the car market’s recovery, with year-over-year increases of 58% and 48% recorded in January and February respectively.
Due to these positive signs, dealers can expect full-year new vehicle sales to reach 14.2 million, 3% more than the 2022 total. However, while acknowledging that the car market’s performance has been “surprisingly strong given all the bad economic news,” Cox Auto’s Senior Economist Charlie Chesbough warns that this strength is likely to be temporary. “In fact, sales volume in Q1 will be down 3% from last quarter, suggesting that market headwinds are growing,” he explains. “Inventory levels at some automakers are moving back up above pre-pandemic normal, suggesting that overall demand has slowed in some corners of the market.”