Improved Inventory Levels, Higher Fleet Sales Expected to Support Improving January U.S. Auto Sales
Tuesday, February 7th, 2023
New-vehicle sales in January are expected to show a surprising gain when announced next week, even though market conditions have not appreciably changed. The January 2023 auto sales pace, or seasonally adjusted annual rate (SAAR), is expected to finish near 15.6 million, a large increase from December's 13.3 million pace, according to a forecast released today by Cox Automotive. However, some of the gain is due to statistical adjustments that correct for expected fewer sales in January and February.
With inventories improving daily, sales in January will benefit, increasing the sales pace. Sales volume for the month is expected to rise nearly 3% over January 2022's inventory-constrained market but with the same number of selling days. January sales are expected to fall almost 20% month over month, largely due to three fewer selling days than December and the usual post-holiday drop in activity.
As we start 2023, high interest rates continue to hold back the new-vehicle market, while some concerns with inventory supply appear to be falling away. According to Charlie Chesbrough, Cox Automotive Senior Economist: "After a slow December, a return to 'normal' would be welcome. With inventories improving, and more fleet activity likely, we are expecting an increase in January new-vehicle sales activity. Though some dealer lots across the country have ample inventory, some Asian brands continue to have extremely limited availability. One of the key questions for the market this year is whether some brands – particularly American ones – will be forced to increase incentives to keep supply from getting too high."