As the effects of the COVID-19 pandemic continue to be felt across the automotive industry, US auto sales have suffered in recent years. However, analysts predict that the market will see a rebound in 2023 as a recovery in vehicle production offsets the impact of rising interest rates and inflation. General Motors CEO Mary Barra has stated that the company is anticipating an industry-wide total of around 15 million vehicles in 2023, although they are prepared for fluctuations.
Inflation and increasing interest rates have made it more difficult for some consumers to afford new cars, leading to a rise in auto loan defaults. At the same time, used car prices, which often influence trade-in values when buying a new car, have been decreasing. Despite these challenges, Toyota executive Jack Hollis believes that pent-up demand from the past two years of vehicle shortages will bring many consumers back to showrooms in 2023. Hollis estimates that the industry could sell as many as 17 million vehicles this year if it weren't for supply chain issues.
Overall, analysts expect retail sales of new cars in December to have risen 4% from the previous year to 1.27 million, with a total sales figure for 2022 likely to be below 14 million units. This would be the lowest annual sales figure since 2011, when the US was recovering from the Great Recession.
In conclusion, while rising interest rates and inflation may continue to put pressure on the US auto industry, a recovery in vehicle production and pent-up demand are expected to drive sales upward in 2023. Automakers will have to navigate supply chain issues and potentially adjust pricing strategies in order to meet this expected increase in demand.
If your dealership needs help navigating these waters, we hope you'll reach out. Nick@CarSherpas.Com