Increased consumer spending on new vehicles in the U.S. is helping to pave the way for a first-quarter record, with total sales expected to reach 3,526,700 units — a 7.3 per cent increase from Q1 2022, when adjusted for selling days.
Total new vehicle sales for March, including retail and non-retail transactions, are anticipated to reach 1,330,700 units. That translates to an increase of 6.2 per cent this year, from the same period in 2022, based on a J.D. Power and LMC Automotive forecast. It should also be noted that March 2023 has the same number of selling days as the previous year.
“March is shaping up to be yet another positive month for the industry. With retail sales forecasted to be up nearly 2 per cent — along with average transaction prices tracking up 3.5 per cent — consumers are pace to spend nearly $50 billion this month, an increase of 5.5 per cent from what they spent on new vehicles a year ago,” said Thomas King, president of the data and analytics division at J.D. Power, in a statement.
As for new vehicle retail sales, those numbers are expected to increase in March when compared to the same period in 2022. Sales are projected to reach 1,090,500 units — up 1.9 per cent from March 2022. And new vehicle retail sales for Q1 2023 are anticipated to reach 2,858,500 units, representing a 0.2 increase from Q1 2022 when adjusted for selling days.
“Retail demand for vehicles remains strong, due primarily to considerable pent-up demand. The availability of new vehicles in inventory at retailers is improving, resulting in a softening of dealer margins and increased manufacturer incentive spending. But, overall, the industry remains supply constrained, and profitability is well above historical norms,” said King in a statement.
He added that this dynamic of “high transaction prices despite increased production levels” is being assisted by a greater focus from OEMs on sales to fleet customers.
Overall, King said Q1 2023 represents another period of “remarkable profitability” for OEMs and retailers. Profits may be less favourable than last year, but this is still the second-best quarter on record, he noted. “The industry is still positioned to enjoy one of the most profitable years on record.”