New-Vehicle Sales to Increase 11% Through First Half of 2023

Cox Automotive forecasted June 27 that U.S. new-vehicle sales volume will reach 7.65 million units in the first half of 2023, an increase of 11.6% year over year.

After a stronger-than-expected first half, punctuated by a notable improvement in fleet sales, Cox Automotive has increased its full-year sales forecast to 15 million.

Sales volume in June is expected to reach 1.3 million units, up from 1.1 million a year ago.

The June seasonally adjusted annual rate (SAAR) is forecast at 15.2 million, an increase of more than 16% compared to June 2022, when new-vehicle inventory was less than half the current levels.

“We came into 2023 concerned about affordability, supply constraints, and a fragile economy,” said Cox Automotive chief economist Jonathan Smoke in a recent news release. “But the jobs market has remained healthy, and consumers have found a way to buy new wheels. As we close the first half, the market is showing signs of being more balanced, with smaller, more predictable changes in sales and less news about big price changes.”

A key driver of the new-vehicle market in 2023 has been the vastly improved new-vehicle inventory levels, which are up more than 70% year over year in June.

Days of supply has also increased notably, holding near or above 50 days through much of the first half. In the first half of 2022, days of supply averaged closer to 35 days. Fleet sales have also underpinned the market improvement through the first half.

Initial forecasts suggest fleet sales could increase by more than 40% year over year through the end of June, as retail sales are likely to show gains of about 3%.

First Half Performance Ups Full-Year Outlook

New-vehicle sales through the first half of 2023 are forecast to increase by nearly 800,000 units over the first half of 2022, according to Kelley Blue Book estimates.

The sales pace through the first half has been 15.4 million, up from 13.7 million in the first half of 2022.

With expectations of some minor slowing in the second half of 2023, Cox Automotive is increasing its full-year new-vehicle sales forecast to 15 million, a gain of nearly 8% from 2022, when sales finished at 13.9 million.

Fleet sales are now forecast to finish the year at 2.6 million, up from 1.8 million in 2022. Full-year retail sales are forecast to increase from 11.7 million in 2022 to 12.4 million in 2023.

“The resilience of vehicle buyers in the face of historic increases in interest rates has been surprising,” said Cox Automotive senior economist Charlie Chesbrough. “However, maybe less surprising, but more than we expected, has been the industry’s return to old habits to move the metal. We expect that headwinds will grow in the second half of this year as credit availability and unfulfilled demand become scarcer.”

GM Remains On Top; Toyota Volume Falls

General Motors will remain the top automaker in new-vehicle sales through the first half of 2023.

GM sales are forecast to increase by more than 17% year over year in the first half. Toyota, which continues to operate with among the leanest new-vehicle supply in the industry, will remain No. 2 and slightly ahead of Ford.

A standout in the market has been the Hyundai Motor Company, with its Hyundai, Kia and Genesis brands. Hyundai sales through the first half are forecast to increase by more than 16% year over year.

In terms of total sales, Hyundai has passed Stellantis to become the 4th largest automaker by sales in the U.S.

Most companies increased sales in the first half, with strong increases from Honda, Mazda, Nissan, and Tesla. In all cases, improved inventory levels have helped drive higher sales volumes.

Higher incentives and – in the case of Tesla – aggressive price cutting has helped drive further growth. 

EV Sales Climb, Inventory Builds

Cox Automotive is forecasting U.S. EV sales to surpass 1 million units for the first time in 2023, and through the first half, EV sales are very much on course. Sales of pure battery electric vehicles are forecast to reach nearly 500,000 units in the first half, up from 355,000 a year earlier. EV share is approaching 7% of the total U.S. auto market.

EV availability has increased substantially in the first half of 2023. As the second quarter of 2023 draws to a close, EV inventory across the U.S. is estimated to be above 90,000 units for the first time.

A year ago, when inventory everywhere was scarce, EV supply was closer to 21,000 units. The EV sales pace has increased but not as quickly as inventory.

In June, based on data from the vAuto Available Inventory Database, Cox Automotive is estimating that days of supply for EVs is at 92 days, up from 36 days a year ago and well above the industry-wide average of 51.

June 2023 Sales Forecast Highlights

• The annual sales pace in June is forecast to finish near 15.2 million, up 2.2 million from last June’s pace and up from May’s pace of 15 million.
• Sales volume is expected to rise 16.3% from one year ago and reach 1.33 million units.
• There are 26 selling days in June 2023, the same as June 2022.

Q2 2023 New-Vehicle Sales Forecast Highlights

• New-vehicle sales in Q2 2023 increase from Q1 and jump 15.3% from Q2 2022.
• While nearly all automakers increased sales year over year, Toyota and Daimler fall.
• Hyundai jumps past Stellantis through the first half; Tesla passes Subaru.

All percentages are based on raw volume, not daily selling rate. There were 152 selling days in H1 2022 and H1 2023.

Originally posted on Vehicle Remarketing

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