New light vehicle sales in July are expected to sustain
recent momentum.
S&P Global Mobility projects <span/>new US light vehicle sales volume in July
2023 to reach 1.33 million units, up 18% year over year. Expected
July results represent a full calendar year worth of consecutive
monthly sales growth (as measured in year-over-year unadjusted
monthly volume comparisons), reflecting the recovery from the
depths of the supply chain constraints realized through much of
2022. This volume would translate to an estimated sales pace of
16.1 million units (seasonally adjusted annual rate: <span/>SAAR).
“New light vehicle sales will continue to progress in July,
reflecting the current trend of sustained demand levels to the
fleet sector while retail sales continue to climb,” said Chris
Hopson, principal analyst at S&P Global Mobility. “From both an
economic growth and auto demand perspective, the first half of 2023
has proven once again that one shouldn’t doubt the spending
capacity of US consumers.”
Commensurate with the better-than-expected economic and auto
sales data over the past six months, S&P Global Mobility has
upgraded its calendar year 2023 US light vehicle sales forecast to
15.4 million units (up from 15.1 million in its previous forecast
release).
The near-term outlook remains unclear as the new vehicle sales
environment will be defined in the second half of the year by the
dueling possibilities that auto consumers will be pressured by
potential vehicle affordability issues (rising interest rates,
credit tightening, still high vehicle prices) while at the same
time, production advances could build back inventory more quickly
than anticipated, setting up a scenario to alleviate some of the
pricing pressures within the new vehicle market.
Although the July 4 weekend represented a trifecta of the end of
the month, end of the quarter, and a holiday weekend, the sales
pattern for the weekend was consistent to preceding <span/>months-end in terms of
sold inventory.
“The long weekend took a chunk out of available advertised
inventories – from 1.843 million in mid-June to 1.761 million on
July 3,” said Matt Trommer, associate director of Market Reporting
at S&P Global Mobility. “Perhaps more notable is that available
inventories in mid-July almost immediately rebounded to 1.867
million, surpassing the year-to-date highs seen in mid-June.”
Various industry-specific risk factors remain prevalent in the
outlook for the remainder of the 2023, including the potential for
North American vehicle supply disruptions as union negotiations
take shape.
“With some US manufacturers maintaining higher levels of
inventory in relation to demand, North American production levels
are expected to slow later this year, with the reduced volume
effectively acting as risk mitigation for the high probability of a
union strike,” said Joe Langley, associate director, light vehicle
production forecasting at S&P Global Mobility.
BEV share holding steady
Battery electric vehicle (BEV) share is expected to represent
7.6% of July sales, remaining on trend with the preceding months.
Continued development of BEV sales remains a constant assumption
for 2023 although some month-to-month volatility is expected as BEV
pricing changes remain dynamic especially as aggressive BEV
production expectations and new product introductions gain momentum
in the second half of the year.
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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- Source: http://www.spglobal.com/mobility/en/research-analysis/us-auto-sales-progress-again-in-july.html
