Compared to a year ago, Cox Automotive is forecasting an improved start for new vehicle sales in 2025.
Historically a low-volume month, January volume is projected to reach 1.125 million a 5.2 percent increase compared to January 2024. Cox Automotive forecasts January’s seasonally adjusted annual rate (SAAR) to be 15.8 million, an increase from 15.0 million last year and the highest January SAAR in three years. January has 25 selling days this month, one less than last month but the same as last year.
The numbers are expectedly down from December 2024, dropping 25.3 percent. Cox’s senior economist Charlie Chesbrough noted the sales pace in November and December 2024 were at the highest levels Spring of 2021.
Inventory, Incentives Remain Robust
“January is generally one of the slowest months of the year for vehicle sales,” Chesbrough said. “A large decline from December is normal. However, severe weather across the country, along with the fires out west, will negatively affect consumer activity, though the extent is uncertain.”
After finishing 2024 at just over 16.0 million units, according to the Kelley Blue Book estimates, Cox Automotive is forecasting new light vehicle sales to continue to improve modestly this year to reach 16.3 million by year’s end. Positive economic growth coupled with improved buying conditions should lead to a two to three percent gain.
Cox’s officials highlighted that inventory and incentives remain higher than they were a year ago, suggesting dealers still have sufficient inventory and are offering deals to entice buyers.
According to an of vAuto Live Market View, the total U.S. supply of available unsold new vehicles at the start of January stood at 2.88 million units, the first time it registered below 3 million since the end of October. This decline in inventory levels indicates a tightening supply situation in the market.
Segment Sales Breakdown
By segment, compact SUV/crossover and full-size pickup trucks were the only sector expected to report positive year-over-year growth. Truck sales are forecast up 14.5 percent at 165,000 while compact SUV/crossover are projected to increase 6.3 percent at 200,000—the most cars sold in a single sector.
For the rest of the market, mid-size SUV/crossover were estimated to be down 0.4 percent from last January with 63,000 sold, mid-size cars dropping 13.1 percent to 55,000 and compact cars declining 11.0 percent to 77,000.
Other segment sales are estiamted to reach 460,000, rising 9.8 percent from January 2024.
“New-vehicle sales have been strong since the election, but they are expected to moderate slightly this month,” said Cox. “Sales pace in November and December were at the highest levels we’ve seen since the spring of 2021, but a dip this month is likely.”
But Cox has warned policy changes regarding tariffs and electric vehicle tax credits from the Trump Administration could have negative effects on the market, particularly in the second half of the year.