December Expected to Bring a 13% Increase in U.S. New-Vehicle Sales Due to Discounts and Inventory Growth

Rivian has recently opened a showroom in Laguna Beach, Calif., to cater to the growing demand for new vehicles as the automotive industry is expected to experience a rise in sales. Consultancy reports from industry experts J.D. Power and GlobalData suggest that new-vehicle sales in the U.S. are set to increase by about 13% in December, reaching approximately 1,396,700 units. This surge is fueled by an increase in inventory levels, with total sales for the year 2023 estimated to be just under 15.5 million units, marking a 12.8% increase from the previous year.

Car dealers are gearing up for winter sales by offering generous incentives and discounts to clear out older vehicle stocks, aiming to capitalize on continued demand. The report estimates that per-unit incentive spending will reach $2,458 in the month, encouraging an estimated $50.4 billion in spending on new vehicles. However, although improving vehicle availability and affordability are driving sales growth, an increase in new-vehicle supply and higher interest rates are also leading to a decrease in per-unit dealer profits.

On the bright side, the average transaction price (ATP) for new vehicles in the United States is expected to be $46,055 in December, slightly down from the $47,362 ATP for the same period in 2022. Looking ahead, the report projected a 3% increase in global demand to 92.3 million units in 2024, emphasizing the sustained growth and development of the automotive industry.

As dealers and automakers anticipate the arrival of new models in January, the industry is poised for a robust year ahead, characterized by increasing sales and a positive outlook for the future.