Car sales for for the first month of 2024 are expected show gains compared to a year earlier when sales figures are announced, according to officials at Cox Automotive. The January sales data falls in line with Cox’s 2024 prediction of a year returning to normal for auto dealers.

Observers are forecasting January new-vehicle sales in the U.S. to show gains over last year as volume is expected to increase 8.3% over January 2023, a market that was still recovering from severe product shortages.

Historically the low-volume leader in any given year, January is forecast to be down 21.3% as compared to December, usually the high-volume month in any given year.

Matching Historical Trends

“January is normally one of the slowest months for vehicle sales, as the December hangover and cold weather keep car and truck shoppers from wandering dealer lots,” said Charlie Chesbrough, senior economist at Cox Automotive, in a press statement.

“This January will be no exception, compounded by a few large storms and deep freezes across the country, which likely had an additional negative impact on sales. Unlike last year, though, available inventory and incentives will not be a problem.”

The seasonally adjusted annual rate (SAAR), in January is expected by Cox Automotive to finish near 15.8 million, down just slightly from the 15.9 million SAAR in December but up 0.7 million over last year’s pace. January has 25 selling days, one more than last year but one less than last month.

Eye on Fleet Sales

The SAAR has bounced between 15.0 and 16.0 million throughout 2023, and this month’s results are expected to remain within these boundaries.

Fleet sales are expected to be a key contributor to total new-vehicle sales in January and throughout 2024. Down slightly in October and November due to the UAW strike, they rebounded in December and is expected to continue to rise in with strong commercial and rental vehicle sales anticipated.

Cox Automotive is forecasting fleet sales in 2024 will increase more than 7% from 2023 and grow faster than retail sales.

Five Predictions

The Janaiury sales data falls in line with Cox’s 2024 prediction of a year returning to normal for auto dealers. In their forecast, they highlight there is no suggested surges in vehicle values, supply and demand imbalance, and interest rates reaching highs not seen in almost 25 years.

The Cox Automotive Economic and Industry Insights team offered the following five keys to U.S. auto market in the coming year.

• Slow Growth Ahead. Cox Automotive expects that the economy in 2024 will experience weak growth but will not experience a recession as high interest rates and declining inflation will likely continue, limiting consumer spending.
• Vehicle Supply Is Back, Favoring Consumers, Placing Downward Pressure on Prices. New inventory is expected to reach pre-pandemic norms in 2024, with almost 3 million units available, or three times the amount during the chip shortage. New-vehicle sales in 2024 are expected to have a modest gain over 2023, and the market new-vehicle market reaching sales of 15.7 million.
• In 2024, We Officially Bid Farewell to the Seller’s Market. For many dealers, their profits will be affected by rising manufacturer’s suggested retail prices (MSRPs), invoice prices due to material and labor costs, higher floor plan costs and the need to invest in infrastructure to support the growing sales of electric vehicles. Heading into 2024, dealers are less optimistic about the future due to interest rates and weaker profits.
• In the Electric Vehicle Market, 2024 Will Be the Year of More. Cox analysis expect U.S. electric vehicle sales in will exceed the 1-million-unit record set in 2023 as the combined market of electric vehicles, plug-in hybrids, and hybrids will account for just under 25% of the market. EV’s alone are expected to account for more than 10% of total sales.
• Car Buying in America: Normal is Nice. A balance is expected for the first time since the pandemic, leading to more options, better deals, and easier access to online buying tools for American consumers and fleet buyers.

“The past four years have been chaotic, even by auto industry standards, and have shifted many normal seasonal patterns out of whack, which adds to the difficulty of forecasting what comes next,” said Cox Automotive Chief Economist Jonathan Smoke.