Total new-vehicle sales for December 2023, including retail and non-retail transactions, are projected to reach 1,396,700 units, a 13.2% increase from December 2022, according to a joint forecast from J.D. Power and GlobalData.
As noted in the research report, December 2023 has 26 selling days, “one fewer than December 2022. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 9.0% from a year ago.”
The seasonally adjusted annualized rate (SAAR) “for total new-vehicle sales is expected to be 15.4 million units, up 1.7 million units from December 2022.”
New-vehicle total sales in Q4 2023 are “projected to reach 3,826,000 units, a 9.8% increase from Q4 2022 when adjusted for selling days. New-vehicle total sales for 2023 are projected to reach 15,466,000 units, a 13.2% increase from 2022 when adjusted for selling days.”
New-vehicle retail sales for December 2023 “are expected to increase when compared with December 2022. Retail sales of new vehicles this month are expected to reach 1,169,000 units, a 13.1% incraese from, December 2022.”
Comparing the same sales volume “without adjusting for the number of selling days translates to an increase of 8.9% from 2022. New-vehicle retail sales in Q4 2023 are projected to reach 3,186,700 units, a 9.8% increase from Q4 2022 when adjusted for selling days. New-vehicle retail sales for 2023 are projected to reach 12,645,600 units, an 8.4% increase from 2022 when adjusted for selling days.”
Thomas King, president of the data and analytics division at J.D. Power, said:
“December results cap off the year with a strong performance, illustrated by double-digit year-over-year sales growth and the second-highest consumer expenditure on new vehicles ever recorded for the month. Total sales of just under 15.5 million for 2023, represent a significant increase of 12.8% from 2022, when just 13.7 million vehicles were sold. What’s even more noteworthy is that consumer expenditure on new vehicles in 2023 set a record of $578 billion. This is the third consecutive year in which U.S. consumers spent more than half a trillion dollars buying new vehicles.”
As noted in the update:
“Sales growth for December is being enabled by improving vehicle availability and affordability. Retail inventory levels in December are expected to finish around 1.7 million units, a 7.6% increase from last month and 55.1% increase compared with December 2022, but still nearly 40% below pre-pandemic levels.”
As mentioned in the report:
“As inventory improves, the average new-vehicle retail transaction price is declining. Transaction prices in December are trending towards $46,055, down $1,274—or 2.7%—from December 2022. However, even with the decline in average transaction prices, consumers are on track to spend nearly $50.4 billion on new vehicles this month—the second highest on record for the month of December and 5.1% higher than December 2022.”
Sales to fleet customers are also rising as vehicle availability improves. Fleet sales are projected to increase 13.6% from December 2022, or 9.4% on a non-selling day adjusted basis.
As stated in the update:
“While retailers continue to pre-sell vehicles, rising inventory is enabling more shoppers to buy directly off dealer lots. In December, 35.5% of vehicles are projected to be sold within 10 days of their arrival at the dealership, which is down from the peak of 57% in March 2022. The average time that a new vehicle spends in the dealer’s possession before being sold is expected to be 38 days, up 13 days from a year ago, but still less than half the pre-pandemic average of 70 days.”
The report added that in 2024, retail inventory is “expected to keep rising and that increase in supply will lead to moderation in pricing. Additionally, anticipated interest rate cuts will also help affordability.”
This trend will drive “an increase in sales, but at the expense of OEM and retailer per-unit profitability.”
This tradeoff between increased volume and lower per-unit profit “means that total profitability for OEMs and retailers will remain very strong relative to historical levels.”
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