New vehicle sales worldwide are forecasted to exceed 88 million in 2024, with sales in the United States growing despite concerns about the economy.
S&P Global Mobility is estimating 88.3 million new vehicle sales worldwide next year as supply chain issues fade and consumer uncertainty overtakes pent-up demand.
New light vehicle sales in 2024 will see a 2.8% increase year-over-year worldwide. Full-year 2023 global light vehicle sales— projected to reach nearly 86.0 million—represent an 8.9% increase from 2022 levels, with new auto demand benefiting from restocking inventories as supply chains normalize.
U.S. Sales Forecast
But S&P does warn consumer demand will face challenges across the globe due to stickier interest rates, higher new vehicle prices, energy price/supply concerns, auto lending risks, and ongoing electrification growing pains.
“2024 is expected to be another year of cagey recovery, with the auto industry moving beyond clear supply-side risks, into a murkier macro-led demand environment,” said Colin Couchman, executive director of global light vehicle forecasting for S&P Global Mobility.
As for the U.S., sales volumes are expected to reach 15.9 million units in 2024, a 2.0% increase from the projected 2023 level of 15.5 million units.
Challenges Ahead
Chris Hopson, manager of North American light vehicle sales forecasting for S&P Global Mobility, warned U.S. auto buyers will not be immune in facing affordability issues by way of high interest rates, tight credit conditions and slow-to-recede new vehicle prices in the new year.
“An uncertain consumer translates to an expectation of a mildly progressing auto sales environment next year,” said Hopson.
“With an assumption that auto production levels will continue to advance in 2024, growth of new vehicle inventory presents the opportunity for rising incentive levels and deal making—a potential release valve to the vehicle price pressures realized over the last year.”
BEV Market
With the rollout of several highly anticipated models, battery electric vehicle sales (BEV) will continue to develop in the new year as there will be nearly 100 BEV models available, double the number there were in 2022. The new models will cover more segments and provide consumers more choices, according to S&P analysts.
Global sales in 2024 for battery electric passenger vehicles are projected for 13.3 million units, accounting for an estimated 16.2% of the overall market.
For the North American region, overall production is expected to make a small gain, 0.5%, at 15.7 million units—boosted by 3.9% growth in U.S. activity. Inventory restocking continues to provide an upside, but it is not uniform, with pockets of the Detroit-based automakers lineup overstocked while Japanese and Korean brands still have a pipeline to fill.
A glut of BEVs at dealerships is an issue recently raised by auto dealers. Nearly 4,000 franchised car dealers the U.S recently urged President Joe Biden to slow down due a federal push “the supply of unsold BEVs is surging, as they are not selling nearly as fast as they are arriving at our dealerships—even with deep price cuts, manufacturer incentives, and generous government incentives.”
“A major concern is how ‘natural’ EV demand will fare as governments consider scaling back interventionist policy support–especially for incentives and subsidies, industrial policy, and OEM planning targets,” said Couchman.
