Rising interest rates could dampen demand as year continues, Cox Automotive says.
IMAGE: Pexels/Richard Taveira
An August new-vehicle sales forecast indicates a big year-over-year jump in volume as revived inventories meet pent-up demand.
Cox Automotive expects the month’s sales to be up 19% over last August, when supplies were still under pandemic-influenced constraints. August sales should also be up month-over-month, Cox said, by 3%.
Sales into rental fleets have been particularly robust.
Easing of prices inflated during the Covid era is also fueling sales, along with the return of manufacturer incentives, Cox said.
“But rising interest rates, and their impact on affordability, remain strong headwinds against a more robust vehicle market,” said Cox Senior Economist Charlie Chesbrough.
Federal Reserve Chairman Jerome Powell said Friday that the Fed may raise interest rates again to gain its target 2% inflation. High rates combined with high vehicle prices have already discouraged many vehicle shoppers.
Cox expects the seasonally adjusted annual rate, or SAAR, for August to be about 15.4 million, down from 15.7 million in July, though it said the drop is more of a statistical difference related to this August having an extra selling day year-over-year and two additional selling days month-over-month.
