Forecaster Edmunds said inventory meeting demand compared to prepandemic surpluses from overproduction results in less generous incentives and many consumers holding out.
Pexels/Erik McIean
Balanced supply and demand resulted in lower projected third-quarter new-vehicle sales, according to an Edmunds forecast.
Deliveries are estimated to total 3.9 million units, down 2% year-over-year and 5% month-over-month, the company said.
It blamed inventory meeting demand compared to prepandemic surpluses from overproduction, a scenario that results in less generous incentives and many consumers holding out.
“Although this is an overall healthy place for the industry to be in compared to automakers’ pre-pandemic habits of overproduction and inventory glut, it unfortunately has also limited potential discounts or promotions for shoppers,” said Edmunds Head of Insights Jessica Caldwell in a press release.
Still-inflated prices, in addition to high interest rates – this month’s rate cut came toward the end of the quarter and won’t trickle down to auto loans for a while – continue to present affordability issues for many auto shoppers, though conditions have improved in that regard.
The Federal Reserve has hinted at another possible big rate cut this year, and that combined with the 2024 model year ending could create sales momentum in the fourth quarter, Caldwell said, though she tempered the optimism with the other side of the market coin.
“But there are a few other uncertainties on the horizon that could also threaten auto sales through the rest of the year, such as potential disruptions from an East Coast port strike and consumer sentiment surrounding the outcome of the presidential election.”
