On the Dash:
- Dealers face lower sales volumes and reduced foot traffic due to seasonal disruptions and overall market softness.
- Rising incentive rates provide opportunities for dealers to stimulate demand while balancing margins.
- Inventory constraints and shifting EV/hybrid market shares require dealers to strategically manage allocation and customer demand.
In the latest NADA Market Beat report, new-light vehicle sales in January hit a seasonally adjusted annual rate (SAAR) of 14.85 million units, down 4.1% year-over-year and the lowest monthly SAAR since January 2024. Severe winter storms in the latter half of the month disrupted dealer traffic and sales in affected regions.
Average incentive spending rose 5.6% from January 2025 to $3,335 per unit but fell 5.5% compared to December 2025. As a percentage of MSRP, incentives averaged 6.6%, well below pre-pandemic levels near 10%, suggesting dealers and automakers have room to increase discounts to stimulate demand.
Battery electric vehicle (BEV) market share fell to 6.6%, a 1.9 percentage-point decline from January 2025, reflecting the absence of federal EV tax credits. Conventional hybrids performed strongly, capturing 12.6% of the market, up 0.5 percentage points from a year earlier.
Inventory at the end of January totaled 2.53 million new light vehicles, down 9.2% year-over-year and 2% from December 2025. Dealers can expect inventory to remain between 2.5 million and 2.6 million units through the first half of 2026 before increasing later in the year.
