S&P expects 2024 new-vehicle sales to be tempered by continued economic pressures on consumers, among other factors.
IMAGE: Pexels/Erik McIean
An early forecast of new light-vehicle sales in 2024 puts deliveries up 2% in the U.S. and about 3% worldwide as competing market pressures achieve a tenuous balance.
S&P Global Mobility sees U.S. sales totaling 15.9 million units, up from a projected 15.5 million this year. Global sales are expected to increase from nearly 86 million this year – up about 9% year-over-year – to 88.3 million next year, S&P says.
Closing in on four years since the Covid pandemic descended on the West, S&P considers its lingering effects continuing to cast a limiting pull on consumer energy: high interest rates – though at least it appears they won’t go higher next year; still-high vehicle prices; tight credit conditions; stop-and-go electric-vehicle volume; and general consumer uncertainty should counter revived inventories and pent-up demand, it said in its forecast.
“2024 is expected to be another year of cagey recovery, with the auto industry moving beyond clear supply-side risks, into a murkier macro-led demand environment,” said S&P Executive Director of Global Light Vehicle Forecasting Colin Couchman.
If supply continues to grow, incentives will likely follow, potentially loosening more demand, S&P said.
EV shoppers will have a lot more choice next year as almost 100 models will be on the market by year’s end, S&P said, though EV adoption has been slower than many in the industry expected, and legacy automakers have scaled back production as inventories have piled up. Recent regulatory shifts could alter the equation, it said.
“A major concern is how ‘natural’ EV demand will fare as governments consider scaling back interventionist policy support – especially for incentives and subsidies, industrial policy, and OEM planning targets.”
Production-wise, U.S. output will grow about 4%, though replenishment is expected to be spotty, as the big Detroit three automakers are overstocked and Japanese and Korean brands will still be catching up, said S&P, which is still cautioning of an overall semiconductor supply shortfall as that supply chain settles post-pandemic. It said there shouldn’t be problems next year but could be in 2025 if nonautomotive demand returns in a big way.
