(Reuters) – U.S. new vehicle sales likely rose by a low double-digit percentage in 2023 on sustained demand for crossover SUVs and pickup trucks, but analysts fear a challenging year ahead, with high interest rates eating into demand.
Automakers ramped up their output to keep up with a surge in consumers interest in new vehicles for personal mobility after the pandemic, but demand is set to ease due to a number of factors.
Industry consultant Cox Automotive called 2023 “a surprisingly strong sales year” but added “high vehicle prices and high interest rates remain the industry’s Grinch right now, and that trend will continue into next year.”
Car dealers had to offer generous incentives and discounts in December to clear older inventory.
Full-year sales in 2023 are expected to be up 12% at about 15.5 million units, according to Cox. Consultants J.D. Power and GlobalData have forecast a 13.2% increase for the period.
“This is the third consecutive year in which U.S. consumers spent more than half a trillion dollars buying new vehicles,” J.D. Power said in a report last month.
Major automakers are expected to report a rise in 2023 sales starting Wednesday, with General Motors expected to retain its crown as the top-selling automaker in the United States, ahead of Japanese rival Toyota Motor, according to Cox.
Jeep-owner Stellantis, however, could report a 1.4% drop in sales last year, Cox said.
Electric-vehicle sales are expected to have risen as well. EV leader Tesla reported an about 38% rise in 2023 deliveries, according to figures published by the automaker on Tuesday.
“Sales of EVs continue to rise…just not at the astronomical rate the industry saw in years past,” AutoForecast Solutions said.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shinjini Ganguli)
