Cox Automotive Forecast: New-Vehicle Sales Accelerate in July
ATLANTA, July 26, 2023 – New-vehicle sales, when announced next week by automakers, are expected to show big gains over last year and a slight improvement over last month. The key reason for these gains continues to be the market’s healthy recovery from being supply-chain constrained over the previous two years. The July seasonally adjusted sales rate, or SAAR, is expected to finish near 15.9 million. This is an increase from June’s 15.7 million level and May’s 15.1 million level. Sales have been showing surprising strength this year in spite of large interest rate increases, and July is expected to continue that trend.
July’s sales volume is expected to show a 15.3% gain over last year’s supply-limited market. However, U.S. auto sales volume is expected to decline modestly from last month, mainly due to one less selling day in July versus June.
According to Charlie Chesbrough, senior economist at Cox Automotive: “The return of supply – which is nearly 80% higher than one year ago – has been the key driver of sales this year. However, it isn’t consumers buying all these cars and trucks; rather, it is being fueled at least in part by rental and commercial fleets. When COVID disrupted supply chains and vehicle production, OEMs focused on keeping retail channels as stocked as possible, leaving fleet demand unfulfilled. However, now that production is returning to normal, fleet sales have rebounded, and these sales are significantly lifting industry volume.”
Last month, sales into large commercial, government and rental fleets, not including sales into dealer and manufacturer fleets, increased nearly 45% year over year to 217,572 units, according to an estimate from Cox Automotive. Through the first half of 2023, total new-vehicle sales in the U.S. were up more than 12%, with retail sales increasing by approximately 9% and total fleets sales jumping by more than 34%.