December auto sales in the U.S. are estimated to hit 1.45 million units, translating to an estimated seasonally adjusted annual rate (SAAR) of 16.5 million units, according to S&P Global Mobility analysts.
This would match the month prior reading and result in a fourth quarter selling rate average of 16.4 million units, a step up from the 15.6 million units averaged over the previous three quarters of the year, and the highest quarterly average for this metric since the second quarter of 2021.
The numbers come at the end of the year where cybercriminals sent dealerships back to a time before computers, American voters gave the White House back to Donald Trump and Stellantis parting ways with Carlos Tavares.
December 2024 Sales
According to the Cox Automotive forecast that mirrored S&P’s, sales volume in December is expected to reach 1.47 million, a 7.7 percent increase from last month but flat compared to one year ago.
Charlie Chesbrough, senior economist at Cox Automotive, observed with the U.S. election season now in the rearview mirror, the industry is seeing a bit of a bump up in sales.
“Both October and November saw a shift to a higher sales pace, and a similar outcome is forecast this month,” said Chesbrough. “Many buyers who thought it best to wait to get the best deal are realizing that now is the time to buy before new administration policy changes are implemented.”
“Some vehicle buyers are taking advantage of EV discounts that could be dialed back by the new administration, and others may be concerned potential tariffs may hit prices. So, the market has strong tailwinds as the year comes to a close.”
Average Price Down from 2023
According to Edmunds, the average transaction price (ATP) for new vehicles was $47,465 in 2024, a 0.8 percent decrease compared to $47,851 in 2023, and a 27.2 percent increase compared to $37,310 in 2019. The average annual percentage rate (APR) in 2024 for new vehicles was 7.1 percent, compared to 7.2 percent in 2023 and 5.9 percent in 2019.
In the used car market, the ATP was $27,252 in 2024, a 5.4 percent decrease compared to $28,796 in 2023, but a 32.2 percent increase from $20,618 in 2019. The average APR in 2024 for used vehicles was 11.4 percent, compared to 11.2 percent in 2023 and 8.7 percent in 2019.
Jessica Caldwell, Edmunds’ head of insights, cited affordability—or the lack of it— in the new vehicle market was the recurring theme of 2024.
“Things started taking a more positive turn on the back nine as inventory continued to improve, stronger incentives trickled back into the market, and new vehicle interest rates declined after peaking in May,” said Caldwell. “Consumers are still feeling the pinch, but the market has become a slightly friendlier place for car shoppers than it was at the start of the year.”
Good Year for Manufacturers
Year-over-year sales gains were delivered in 2024 by every major manufacturer except Stellantis and Tesla. General Motors, with it sales forecasted to finish up over 4.2 percent from last year near 2.7 million units, was top in the U.S. market.
Honda gained half a point in share thanks to a more-than-20 percent sales increases from the HR-V and Civic, the two lowest-priced vehicles in its portfolio. In 2024, Honda Motor sales in the U.S.—which combines Honda and Acura volume—outpaced Stellantis, jumping into fifth place on the sales chart.
The Attack on CDK
The biggest impact on dealer operations this year was the ransomware attack on CDK Global. The company’s software, used at 15,000 auto dealers, was first attached on June 19 around 2:00 a.m. EDT, in an event that hampered operations at U.S and Canada dealerships. The company was able to restore some functions back online by that afternoon—but its systems were attacked again before the business day started on Thursday, June 20 and would be offline for another two weeks.
The company reported that “substantially all” of dealerships that use its software across North America were back online to its core management system by July 2, just in time for the July 4 holiday sales weekend.
According to a published report, CDK paid $25 million to restore services. Chris Janczewski, head of global investigations at crypto-tracking firm TRM Labs, told CNN about 387 bitcoin—the equivalent of roughly $25 million—was sent to a cryptocurrency account controlled by hackers affiliated with a type of ransomware called BlackSuit on June 21, the day after the company reported the cyberattack. CDK has not commented on any payment in regard to the ransomware attack. BlackSuit is widely believed to be compromised by Russian and Eastern European threat actors, this organized gang has been a persistent security concern.
Hope after Presidential Election
The year ended with dealers increasingly optimistic about the future now that the 2024 Presidential election is over, according to the Q4 2024 Cox Automotive Dealer Sentiment Index (CADSI). The index rose 12 points to 54 in Q4 from the previous quarter. One year ago, the index stood at 41, one of the lowest readings in its history, according to Cox officials.
After the recent election, 35 percent of dealers surveyed reported the political climate in the U.S. is affecting their business. This is a decrease from the 44 percent of all dealers and 49 percent of franchised dealers recorded in the previous quarter. The current percentage is slightly higher than one year ago when it stood at 33 percent.
But views of the U.S. economy remained unchanged (41), equal to the score in the previous quarter and two points higher than Q4 2023. The top factor holding back business according to respondents is the economy, with 56 percent of dealers citing it as a significant concern. Despite a significant quarter-over-quarter drop, interest rates remain a close second at 52 percent and market conditions were cited by 37 percent of dealers.
Moreno Elected to U.S. Senate
Auto dealers will have one of their own in the U.S. Senate as Bernie Moreno (R-OH) defeated Sen. Sherrod Brown (D-OH) this past November. Post election, Moreno outlined the objectives focused on the auto industry he will work on with the incoming Trump administration to enact in the coming years, stating he and Trump “are on the same page” when it comes to their agenda for automobile industry that will usher in “the golden age of manufacturing in America with Ohio and Michigan leading the way.”
As for federal policies that he sees as a detriment to the auto industry and the economy, Moreno is focused on the tightened fuel-economy standards for new vehicles sold in the U.S. to meet a fleet average about 38 mpg by 2031, up from about 29 mpg and the Environmental Protection Agency’s adoption of stricter tailpipe-emissions rules put forward under the Biden administration.
Amazon, Hyundai, Honda and Nissan
The end of the year saw two significant developments that dealers will be monitoring in 2025: Amazon began selling Hyundai’s online and Honda and Nissan confirmed on Dec. 23 the companies are in talks to merge.
Consumers in 48 U.S. cities are now able to browse, order, finance, and schedule pickup of a new Hyundai vehicle from their local participating dealer directly on Amazon. The kickoff comes a year after the online behemoth and the South Korean auto manufacturer announced the partnership.
Amazon Autos plans to continue to add more Hyundai dealerships as well as other additional manufacturers and cities in 2025.
“With Amazon Autos, we’re bringing the simplicity and ease customers expect from Amazon to car shopping, one of their largest purchases, while offering dealers a new channel to connect with a broad audience,” said Fan Jin, global head of Amazon Autos. “We’re excited to have Hyundai as our exclusive launch partner and look forward to welcoming more brands and expanding our selection to customers as the program grows.”
Japanese Consolidation?
The merger of Honda, Japan’s second-largest automaker, with Nissan, its No. 3, would be the biggest auto deal since Fiat Chrysler Automobiles and PSA $52-billion merger in 2021 that formed Stellantis.
In a joint press conference in Tokyo, Honda CEO Toshihiro Mibe cited technological trends of electrification and autonomous driving as the impetuous of the possible deal. Like other foreign carmakers, the two companies have suffered losses in China to BYD and other domestic makers of electric and hybrid cars.
“The rise of Chinese automakers and new players has changed the car industry quite a lot,” said Mibe. “We have to build up capabilities to fight with them by 2030, otherwise we’ll be beaten.”
Shakeup at Stellantis
The moves by the Japanese automakers were preceded by Stellantis CEO Carlos Tavares’ resigning on Dec. 1. In its announcement accepting the resignation, the company stated “the process to appoint the new permanent Chief Executive Officer is well under way, managed by a Special Committee of the Board, and will be concluded within the first half of 2025. Until then, a new Interim Executive Committee, chaired by John Elkann.”
The sudden announcement was reportedly due to the differences between the board and Tavares, reportedly due to the board believing Tavares was moving too quickly and focusing on near-term solutions to save his reputation that was not in the best interests of the company. Tavares stepped down two months after a profit warning at the maker of Jeep, Fiat and Peugeot cars that has lost around 40 percent of its value this year.
Stellantis dealers were vocal with their displeasure in the last few months, sending a letter outlining their concerns to Tavares in September. Jeff Laethem, who owns a Stellantis dealership in Detroit, said he was relieved at the news of Tavares’ resignation as inventory has built up and sales of once-dependable vehicles dropped. “It couldn’t get worse,” Laethem said, adding his nearby GM dealership has not faced the same challenges.
EV Market Clash
The challenges of the EV market were an issue for much of 2024. Starting at the NADA conference in February, NADA outgoing chairman Geoffrey Pohanka voiced his concerns “about the too-rapid transition to electrification” by the U.S. government’s emission regulations, which aim to speed up the mass-market adoption of electric vehicles.
“It is unfortunate that our government appears to be on the road to banning the sale of gasoline powered cars and without consideration of the lack of domestic supply of critical minerals, the lack of charging infrastructure, and an inadequate electrical infrastructure,” he stated.
The EV Voice of the Customer, made up of about 5,000 franchised dealers, urged President Joe Biden to slow down federal EV mandates. “Despite generous government, manufacturer and dealer incentives, our customers continue to bypass EVs over concerns about affordability, charging infrastructure, performance in cold weather, and resale value,” the group stated in a March letter after the EPA’s announcement to relaxed tailpipe limits. “Worse still, the regulations spike in 2031-32 and revert to the unrealistic mandate that essentially requires that two-thirds of all vehicles sold be electric… We urge the administration to track EV sales versus projections and make necessary adjustments to reflect consumer demand.”
2025 Forecast
As for 2025, U.S. new vehicle sales are expected to rise to their highest level since 2019, led by lower interest rates and improving affordability, according to industry analysts.
Cox Automotive expects new light-duty vehicle sales to hit 16.3 million in 2025, about 100,000 more than forecasts by S&P Global Mobility and Edmunds. Such sales would be up from expectations of 15.9 million to 16 million this year and mark the highest results since roughly 17 million in 2019.
The increase is expected to be driven by a continuing “normalization” of vehicle inventories, incentives and discounts from automakers, all couples with easing financing and loan rates.
“Consumers are still feeling the pinch, but the market has become a slightly friendlier place for car shoppers than it was at the start of the year,” said Edmunds’ Caldwell.
One of the largest growth markets is expected to be entry-level and less expensive vehicles. The industry has been dealing with years of elevated prices and lower inventories since the coronavirus pandemic. Another expected growth area remains electrified vehicles, including hybrids, plug-in hybrid and all-electric models, according to analysts.
Trump Effect
All-electric vehicle sales in the U.S. are forecast to set another record in 2024, with total sales volume near 1.3 million, according to Cox. That would mark roughly 8.0 percent market share, up from 7.6 percent compared with last year but lower than expectations of 10 percent earlier this year. Cox expects roughly 25 percent of new vehicle sales to be electrified in 2025, including a more than 10 percent penetration for all-electric models.
But do have some bearish concerns, noting Trump’s election vows to end federal consumer credits for purchasing the vehicles of up to $7,500 and tariff threats that could affect vehicle production in Canada and Mexico.
Cox Automotive’s chief economist Jonathan Smoke said tariffs on those countries, which Trump has said could be 25 percent, would be “a radical disruption” to the U.S. new vehicle market.
