After a year of new car shortages, America’s car dealers are starting to restock to a historically normal inventory level. The message is getting out. Americans are going car shopping again.
Cox Automotive now forecasts that Americans will buy 6% more cars in the first quarter of this year than last.
Cox Automotive is the parent company of Kelley Blue Book.
That doesn’t bring shopping back to historical norms. “We continue to believe supply constraints and affordability issues will put a ceiling on what’s possible in the year ahead,” noted Cox Automotive Chief Economist Jonathan Smoke. “With the job market still strong, the largest demand problem for automotive in 2023 will be rising interest rates that push many would-be buyers out of the market.”
Americans routinely bought more than 17 million cars yearly before the COVID-19 pandemic upset worldwide supply chains. Last year, they bought just 13.9 million.
After a stronger-than-expected start to 2023, Cox Automotive is adjusting its full-year new-vehicle sales forecast to 14.2 million.
For car shoppers, though, what matters isn’t the total number of sales. It’s how many cars of the kind you want to buy dealers have for sale.
Prices go down when dealers have too many. That’s the case in the full-size truck market this month, where all of the Big Three domestic automakers have at least an 80-day supply of trucks (they aim for about 60). That surplus could lead to sales incentives — although GM recently decided to solve its problem by idling a truck factory so it could sell down the backlog without discounts.
