Market researchers at Edmunds believe that 2023 will bring a small but noticeable increase in new vehicle sales thanks to slight economic recoveries seen throughout the year.
The report, published this Wednesday, argued that inventory stabilizations, better selections and generous discounts from dealerships will help bring consumers back into the market, ultimately raising sales numbers for new vehicles to 14.8 million units in 2023. The final count for new cars sold this year has yet to be tallied, but in its November report, Cox Automotive estimates a score of 13.1 million.
However, despite the predicted 1.7 million improvement, Edmunds refrains from painting an overly positive picture of things to come. Instead, the report posits that interest rate hikes will be the biggest issue for buyers in 2023.
The Federal Reserve has continued its strategy of increasing rates to battle inflation, a tactic which drove interest payments and prices for new and used cars to all-time highs in November. Automakers and dealers have done their part to reduce the impact with generous warranties and discounts, but a return to pre-COVID numbers won’t happen until consumers can actually afford their monthly leases.
The 2023 report comes at a time of high-anxiety for the auto-industry. Automakers have poured billions into EV production in an effort to compete with current monopoly holder Tesla, and, while the power struggle has made an impact, electric cars sales continue to be dismal. Dealership sentiment is also at an all time low for next year, as many struggle to make ends meet.
However, it is important to note that 2022 was a year full of surprises for the auto-industry. While 2021 was arguably better for certain sectors, most of the early year production and sales forecasts were easily surpassed thanks to supply chain stabilizations and pragmatic retail strategies. Whatever happens next, 2023 is likely to be just as unpredictable.
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