The automotive industry is set to experience a shift in 2024 as new trends and developments emerge, according to a recent report by Cox Automotive. The U.S. auto market is expected to see a return to normalcy, with vehicle sales starting to slow at the end of last year due to “sticker shock” and high interest rates on car loans.
Despite these challenges, the industry is predicted to see a slight increase in sales, with a 2% growth in 2024, as automakers focus on catering to higher income and credit-quality consumers. However, the average price of a vehicle has reached $48,000, limiting sales to the top 20% of income households.
Cox Automotive’s Chief Economist, Jonathan Smoke, believes that the new norm for the industry is closer to 16 million sales, with the U.S. unlikely to surpass its pre-pandemic sales figure of 17 million anytime soon.
The report also highlights the growing inventory levels and strong fleet activity, which are expected to support an improved sales pace in 2024. The full-year 2023 sales forecast shows an increase of 11.6% compared to 2022, with GM retaining the sales title over Toyota, and Hyundai Motor Group jumping past Stellantis.
As the auto market drives into 2024, the Cox Automotive Economic and Industry Insights team anticipates weak economic growth, higher new-vehicle inventories, and an end to the seller’s market. Overall, the team expects 2024 to be the best year for car buyers since the pandemic.
Delving deeper into the automotive industry trends for 2024:
- Electric Vehicle (EV) Dominance: As we enter 2024, the automotive industry is witnessing an unprecedented shift towards electric vehicles. With major automakers doubling down on investments in electric technology, we can expect significant advancements in battery technology, leading to improved EV range and efficiency. This will further accelerate the adoption of electric vehicles and redefine the automotive landscape.
- Digital Transformation in the Car Buying Journey: The car buying journey is undergoing a digital transformation, with online car auctions gaining traction. This shift is reshaping not just the way vehicles are bought and sold but also the very nature of automotive innovation itself. In the coming years, we can expect to see an upsurge in sustainable mobility solutions as environmentally-conscious consumers and entrepreneurs find opportunities to salvage and repurpose vehicles.
- Automotive Industry Growth and Challenges: While 2024 is set to be a year of growth for the automotive industry, with U.S. auto sales expected to finish the year up more than 11% compared to 2023, the industry still faces challenges. An uncertain economy and a slowdown in the adoption of electric vehicles could put dealers and consumers in a precarious position. However, the industry is expected to adapt and continue its transformation, with advancements in technology and sustainability leading the way.
In conclusion, the automotive industry in 2024 is set to experience significant changes and developments, driven by the growth of electric vehicles, the digital transformation of the car buying journey, and the need to adapt to a changing economic landscape.
