Wall Street and industry analysts remain on high alert for signs of a “demand destruction” scenario for the U.S. automotive industry this year as interest rates rise and consumers grapple with vehicle-affordability issues and fears of a recession. In early 2020, automakers experienced unprecedented pricing power and profits amid resilient demand and low inventory levels due to supply chain and parts disruptions affecting vehicle production. Those factors created a supply problem, which experts believe may switch to a demand problem.
Cox Automotive has 10 predictions for the U.S. auto industry in 2023:
- Federal incentives will encourage more fleet buyers to consider EVs
- Half of the vehicle buyers will engage with digital retailing tools
- Dealership-service operations volume and revenue climb
- All-cash deals will increase to levels not seen in decades
- Vehicle affordability will be the greatest challenge facing buyers
- Used-vehicle values will again see above normal depreciation
- Sales of EVs in the U.S. will surpass 1 million units for the first time
- Retail vehicle sales will fall – new sales will grow as used sales decline
- New vehicle inventory levels will continue to increase
- A slow-growing economy will place pressure on the automotive market
Source: CNBC
