U.S. auto sales are expected to slow during the second half of 2024

Cars sit on a Chevrolet dealership’s lot on June 20, 2024 in Chicago, Illinois. A cyber attack on CDK Global, a software provider that helps dealerships manage sales and service, has crippled the workflow at approximately 15,000 dealerships across the United States and Canada. 

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DETROIT – U.S. auto sales through the first half of the year are expected to be up by 2.9% compared to a year ago, but there are concerns that the auto industry may not be able to continue the momentum during the last six months of the year.

Vehicle inventory levels are growing, incentives are increasing and there’s growing uncertainty during the second half of the year surrounding the economy, interest rates and U.S. presidential election, according to Cox Automotive.

The auto data and research firm expects sales growth to slow during the second half of the year to end 2024 at 15.7 million units, roughly a 1.3% increase compared to 2023. And, unlike in recent years, growth is coming from commercial sales compared to more profitable sales to consumers.

“Overall, we’re expecting some weakness in the coming few months,” said Cox chief economist Jonathan Smoke during a mid-year review briefing Tuesday. “We basically are making some assumptions that we can’t quite hold the pace that we’ve been seeing. But we’re not expecting a collapse either.”

Good for consumers

Such circumstances are largely good for consumers, some of whom have been waiting years to purchase a new vehicle amid unprecedented supplies of new vehicles and record high pricing during the coronavirus pandemic.

They’re a headwind for automakers, many of which posted record profits due to the high demand and low availability of new vehicles during the global health crisis. Wall Street has been predicting vehicle pricing and profit challenges for most automakers compared to the record or near-record levels of years past.

Brand new Tesla cars sit parked at a Tesla dealership on May 31, 2024 in Corte Madera, California. 

Justin Sullivan | Getty Images

“There’s a lot of uncertainty that lies ahead, and it may make recent sales successes hard to build upon,” Charlie Chesbrough, Cox’s senior economist, said during the briefing. “We are concerned that the second half of the year cannot maintain the growth we’ve seen so far.”

Rental, commercial and leasing are showing signs of double-digit growth, while Cox expects retail share of the overall industry to be down 9 percentage points from 2021 to roughly 79%.

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