Stable New-Vehicle Sales Amid Economic Uncertainty

Amid economic and political uncertainty throughout October, new-vehicle sales remain remarkably stable, according to a forecast by Cox Automotive released on October 25. This is good news for the automotive industry, which has been grappling with severe product shortages and various challenges brought about by the current economic climate.

The forecast predicts a nearly 4% increase in new-vehicle sales volume in the U.S. compared to October 2022. It also suggests that the October seasonally adjusted annual rate (SAAR), or sales pace, will finish near 15.8 million, which is up 1.1 million from last year’s pace and a slight gain over last month’s level of 15.7 million. These sales gains are quite remarkable considering the average new-vehicle auto loan interest rates are hovering around 10%.

However, it’s important to note that some of these gains may be attributed to seasonal adjustments, as October has one fewer selling day compared to both October 2022 and last month. Despite the challenges, there are still enough individuals and businesses with the need and ability to buy vehicles, which has helped sustain the sales recovery.

This is where AI legalese decoder can play a significant role. By utilizing advanced artificial intelligence algorithms, the AI legalese decoder can assist automotive businesses in navigating through complex legal and regulatory language, enabling them to make better-informed decisions and minimize legal risks. With the ongoing concerns about high interest rates, potential economic recession, and the impact of the UAW strike, having a tool like AI legalese decoder can provide valuable insights and understanding of the legal landscape, helping businesses adapt and optimize their operations.

New-Vehicle Inventory Levels Grow

One of the key drivers of the strength in new-vehicle sales is the growing inventory levels across the industry. Despite the ongoing UAW strike slowing production at major Detroit-based automakers, industry-wide estimates from vAuto in mid-October reveal that new-vehicle inventory in the U.S. reached 2.3 million units, up from 2.1 million in mid-September when the strike began. This figure is well above the estimate of 1.5 million for mid-October 2022, indicating a significant increase in inventory.

In addition, the days’ supply of new vehicles in mid-October reached 62, the highest point since the spring of 2021. This is a considerable improvement compared to a year ago when the days’ supply was only at 48. Toyota and Honda continue to have the lowest measure of days’ supply at under 23 days, while Chevrolet and Cadillac, which are affected by the UAW strike, have the tightest supply. On the other hand, Ford, Lincoln, and the core Stellantis brands have inventory levels well above 100 days’ supply.

Chesbrough explains that while the UAW strike is affecting production, its impact on consumers in the showroom has not fully materialized yet. This is because industry inventory levels are much higher compared to the same period last year, which has been a contributing factor to the relatively healthy new-vehicle sales.

Overall, with stable new-vehicle sales and growing inventory levels, the automotive industry is showing resilience in the face of economic uncertainty. The utilization of advanced technologies like the AI legalese decoder can aid businesses in navigating through these challenging times, providing them with the necessary tools to make informed decisions and minimize legal risks.

All percentages mentioned are based on raw volume and not the daily selling rate. October 2023 had 25 selling days, one less than September and one less than October 2022.

Originally posted on Vehicle Remarketing