If you’re in the market for a vehicle this year, the landscape should be less challenging than during the pandemic and its immediate aftermath. Here’s what to expect in the 2024 auto industry:
- New Car Sales on the Rise: New car sales are expected to reach 15.7 million units, an increase from last year, as inventory levels improve and price hikes begin to slow. This should offer buyers more selection and even some negotiating power. While incentives, like price breaks and low-interest financing, may return, they likely won’t be as substantial as before the pandemic.
- Gradual Rise in Used Car Sales: Used car prices have stabilized after recent declines but remain about 40% higher than pre-pandemic levels due to tight supply. Buyers may find a few more options as availability increases.
- Growing Popularity of Hybrids: Hybrid vehicles are surging, expected to capture 14% of the market this year, up from 9% in 2023. Hybrids are increasingly popular across vehicle types, from sedans to trucks. With models like Toyota’s Camry transitioning to hybrid-only and Ford’s Maverick hybrid pickup performing well, hybrids offer a balance of fuel savings and traditional handling, appealing to consumers not yet ready to commit to full EVs.
- Slowing Momentum for EV Sales: Electric vehicle sales are still growing, projected to reach 9% of total sales, but inventory levels have risen sharply. Dealerships now hold around 113 days’ worth of EV supply, which may offer buyers more negotiating room. The federal EV tax credit is also more accessible, now applicable at the point of sale, though fewer EV models meet the new domestic production criteria to qualify for it.
Despite production slowdowns, automakers are still committed to electrification, with 37 new EV models set for release in 2024 and 2025. Government regulations on fuel efficiency continue to drive this shift, as manufacturers hope to attract traditional car buyers to their latest EV offerings.
Source: kiplinger.com
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