Will the US light vehicle market finally see a return to normality in 2024?

It’s that time of year again – the time when we like to reflect on the previous 12 months and look ahead to the coming year. Last January, I wrote about our expectations for 2023, and they could be condensed into three predictions: sales would grow, fleet would account for a larger share of the market, and transaction prices would start to modestly decline. All three predictions represented a regression to the mean, which admittedly meant that none of the prognostications were outlandish.

Still, all three predictions proved to be broadly accurate, with some caveats. Fuelled by improved inventory levels, sales did grow in 2023 and surpassed our expectations, largely due to the much-discussed recession never materializing. Fleet sales did indeed increase as a percentage of total sales, to an estimated 18.5% for the year. Meanwhile, average transaction prices declined to US$46,207 by December 2023, a fall of 2.4% YoY. Incentives increased to US$2,633 in December, up by 104.3% YoY. However, prices are certainly still elevated compared to historical levels. The resolution of the UAW contract negotiations should provide more stability for the industry in 2024, although automakers’ labor costs have sharply increased as a result.

Click here for the rest of the article from GlobalData.