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S&P Global Mobility: March 2024 US auto sales reflect uneasy progress

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S&P Global Mobility projects US auto sales in March to exceed 1.4 million units, with an estimated sales pace of 15.8 million units. The first quarter of 2024 is expected to average 15.5 million units, reflecting growth from a year ago but a slight decline from the previous quarter. Inventory levels are up, incentives are rising, and production is expected to continue growing in 2024.
Positive
  • US auto sales in March 2024 are estimated to surpass 1.4 million units, with a sales pace of 15.8 million units.
  • The first quarter of 2024 is projected to have an average sales pace of 15.5 million units, showing growth from the previous year.
  • Inventory levels have increased, with 2.62 million units available at the beginning of March, a 56% rise from the previous year.
  • S&P Global Mobility anticipates light vehicle sales of 15.96 million units in 2024, a 3% increase from 2023.
  • Battery-electric vehicle (BEV) sales are expected to continue growing, with an 8% share projected for March and further advancements in the coming months.
Negative
  • The sales pace for March 2024 reflects a slight decline from the fourth quarter of 2023, indicating some volatility in the auto demand environment.
  • High interest rates, slowly decreasing vehicle prices, and uncertain economic conditions are factors affecting the consistent growth of auto sales.
  • Month-to-month sales volatility is expected in 2024, despite the projected overall growth in light vehicle sales.
  • The current purchase environment for auto consumers presents challenges for sustained sales growth, with some buyers remaining on the sidelines due to higher interest rates.

The projected increase in U.S. auto sales to 1.47 million units for March 2024, as reported by S&P Global Mobility, indicates a positive trend in consumer demand within the automotive sector. This uptick, while modest, suggests that the industry is recovering from previous demand fluctuations. The seasonally adjusted annual rate (SAAR) of 15.8 million units for March and an average of 15.5 million units for the first quarter, reflect the market's resilience despite economic headwinds such as high interest rates and vehicle pricing pressures.

From a market research perspective, the growth in dealer inventories by 56% year-over-year and the dominance of Model Year 2024 vehicles are significant. These factors may lead to aggressive sales strategies, including spring clearance events that could stimulate short-term sales. However, the potential for month-to-month sales volatility remains, as indicated by the 'prolonged holding period' since Q2 2023.

Furthermore, the continued development of light vehicle production aligns with the industry's efforts to normalize supply chains post-pandemic and address inventory shortages from production shutdowns. The projected 3% increase in light vehicle sales volume for the calendar year 2024 to 15.96 million units, while moderate, signals cautious optimism for sustained growth in the sector.

The emphasis on light vehicle sales, including both trucks and passenger cars, provides insight into consumer preferences and market segmentation. The steady SAAR for light trucks at 12.8 million units and passenger cars at 3.0 million units in March 2024 underscores the sustained popularity of light trucks in the U.S. market. This preference has implications for automakers' production strategies and fuel efficiency targets, given the typically lower fuel economy of light trucks compared to passenger cars.

Another critical aspect is the development of battery-electric vehicle (BEV) sales, which are expected to maintain an 8% market share in March. The stability in BEV share, despite the changes to federal tax credits, indicates consumer interest and acceptance of electric vehicles. The anticipation of new BEV models like the Chevrolet Equinox EV, Honda Prologue and Fiat 500e suggests a diversifying market that could lead to an increase in BEV sales share over time.

Overall, the automotive industry must navigate a complex landscape of consumer trends, regulatory changes and economic factors. Automakers and dealers will need to balance inventory management, production adjustments and marketing strategies to capitalize on the current market dynamics and prepare for future shifts in consumer demand, particularly in the electric vehicle segment.

The reported figures on U.S. auto sales and inventory trends have broader economic implications. The increase in auto sales and inventory levels suggests a recovering consumer confidence and spending power, which are positive indicators for the overall economy. The moderate growth projection for 2024 light vehicle sales volume reflects an economy that is navigating through uncertain conditions, including high interest rates that affect auto loan affordability.

Inventory levels, particularly the high percentage of Model Year 2024 vehicles, could suggest that manufacturers are anticipating stronger future demand or are adjusting to a more stable supply chain post-pandemic disruptions. The potential for additional spring clearance activity to move older inventory may also result in temporary boosts to consumer spending and retail sales figures.

It is important to monitor the auto industry's performance as a leading economic indicator. Auto sales data can provide insights into consumer behavior, manufacturing activity and the health of the financial sector through auto financing trends. The projected growth, albeit modest, aligns with a cautiously optimistic economic outlook for 2024.

S&P Global Mobility projects that US auto sales in March will crest over 1.4 million units – just the second time since May 2021 that monthly volume has reached this level.

SOUTHFIELD, Mich., March 26, 2024 /PRNewswire/ -- With volume for the month projected at 1.47 million units, March 2024 U.S. auto sales are estimated to translate to an estimated sales pace of 15.8 million units (seasonally adjusted annual rate: SAAR). This would bring the SAAR average in the first quarter of the year to a level of 15.5 million units.  While progress from a year-ago reading of 15 million units, it would reflect a step down from the 15.7 million unit reading of the fourth quarter of 2023, reflective of the volatile nature of the current auto demand environment.

"March sales volume will be relatively positive, rising to over 1.4 million units," said Hopson.

"With inventory growing, incentives rising, and quarter-end sales targets to be met, March sales volume will be relatively positive, rising to over 1.4 million units for just the second time in the past 34 months," said Chris Hopson, principal analyst at S&P Global Mobility. "However, since the second quarter of 2023, the pace of sales has been in a prolonged holding period, given the current purchase environment facing auto consumers. High interest rates, slowly receding vehicle prices and uncertain economic conditions continue to push against any consistent upshift for demand levels."

Regarding inventory trends, Matt Trommer, associate director of Market Reporting at S&P Global Mobility said, "At the beginning of March, available dealer advertised inventories were up to 2.62 million units, an increase of 56% over last year and up 5% compared to the beginning of February 2023. Model-year (MY) 2024 vehicles represented 84% of that inventory, so pockets of MY2023 vehicles remain, setting up the potential for additional spring clearance activity."

The S&P Global Mobility US auto outlook for 2024 reflects sustained, but more moderate growth levels for light vehicle sales.  Production levels are expected to continue to develop, especially early in the year as some automakers look to continue to restock in wake of production shutdowns late in 2023 and decent December 2023 sales volume.

"Advancing production levels set the stage for incentives and inventory to continue to develop, potentially enticing new vehicle buyers who remain on the sidelines due to higher interest rates, but it will be a bumpy ride and month-to-month sales volatility is likely," said Hopson. "S&P Global Mobility projects calendar-year 2024 light vehicle sales volume of 15.96 million units, a 3% increase from the 2023 tally."






U.S. Light Vehicle Sales



Mar 24 (Est)

Feb 24

Mar 23

Total Light Vehicle

Units, NSA

1,469,600

1,247,516

1,374,992


In millions, SAAR

15.8

15.8

14.9

Light Truck

In millions, SAAR

12.8

12.7

11.9

Passenger Car

In millions, SAAR

3.0

3.1

3.0

Source: S&P Global Mobility (Est), U.S. Bureau of Economic Analysis


Continued development of battery-electric vehicle (BEV) sales remains an assumption in the longer term S&P Global Mobility light vehicle sales forecast.  In the immediate term, some month-to-month volatility is anticipated. March BEV share is expected to reach 8%, similar to the month prior reading as automakers, dealers and consumers continue to digest the changes to IRA Federal tax credits to begin the new year. BEV share is expected to advance over the next several periods, pending the roll outs of vehicles such as the Chevrolet Equinox EV, Honda Prologue and Fiat 500e, all scheduled for market introductions over the first half of 2024.

About S&P Global Mobility

At S&P Global Mobility, we provide invaluable insights derived from unmatched automotive data, enabling our customers to anticipate change and make decisions with conviction. Our expertise helps them to optimize their businesses, reach the right consumers, and shape the future of mobility. We open the door to automotive innovation, revealing the buying patterns of today and helping customers plan for the emerging technologies of tomorrow.

S&P Global Mobility is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information, visit www.spglobal.com/mobility.

Media Contact:

Michelle Culver
S&P Global Mobility
248.728.7496 or 248.342.6211
Michelle.culver@spglobal.com

 

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SOURCE S&P Global Mobility

FAQ

What is the estimated sales pace for US auto sales in March 2024?

The estimated sales pace for US auto sales in March 2024 is 15.8 million units.

How does the first quarter of 2024 compare to the previous year in terms of average sales pace?

The first quarter of 2024 is expected to have an average sales pace of 15.5 million units, showing growth from the previous year.

What is the projected light vehicle sales volume for 2024?

S&P Global Mobility projects a light vehicle sales volume of 15.96 million units in 2024, a 3% increase from 2023.

What is the expected BEV share for March 2024?

The expected BEV share for March 2024 is 8%, with further advancements anticipated in the coming months.

What factors are influencing the current auto demand environment?

High interest rates, slowly decreasing vehicle prices, and uncertain economic conditions are affecting the consistent growth of auto sales.

Why are some new vehicle buyers remaining on the sidelines in the current purchase environment?

Some new vehicle buyers are staying on the sidelines due to higher interest rates and challenges in the auto consumer market.

What are the challenges faced by auto consumers in the current market?

Auto consumers are facing challenges such as high interest rates, slowly decreasing vehicle prices, and uncertain economic conditions, impacting the growth of sales.

Which vehicles are expected to be introduced to the market in the first half of 2024?

Vehicles such as the Chevrolet Equinox EV, Honda Prologue, and Fiat 500e are scheduled for market introductions in the first half of 2024.

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