Predictions To Consider

Cox Automotive released predictions for the year and, as always, data to back them up. Here are their ten predictions

1. Federal incentives will encourage more fleet buyers to consider electrified solutions. J-Smoke says this will be the majority of new vehicle sales in 23.
2. Half of vehicle buyers will engage with digital retailing tools. The pandemic easing off does not mean people will stop using online tools.
3. Dealership-service operations volume and revenue climb. People are keeping cars longer and longer (and longer) these days. There is nothing more recession-proof than maintenance and tires.
4. All-cash deals will increase to levels not seen in decades. Interest rates are bonkers, so the number of cash purchases will be too.
5. Vehicle affordability will be the greatest challenge facing buyers. Interest rates mean even vehicles with affordable list prices are out of reach after financing.
6. Used vehicle values will see above-normal depreciation for a second straight year. Dramatically elevated used prices are coming back down to pre-pandemic levels.
7. Sales of electric vehicles in the US will surpass 1 million units for the first time. Last year, 808K EVs were sold in the US. Considering all the efforts toward growing that market share by OEMs, it is not hard to imagine more than 1M in 2023.
8. Total retail vehicle sales will fall in 2023 as new vehicle sales grow and used sales decline. Inflation has automakers prioritizing fleet and commercial customers since they cannot wait as long as private citizens.
9. New vehicle inventory levels will continue to increase. Demand is lowering as the supply chain is stabilizing = more inventory.
10. A slow-growing economy will place pressure on the automotive market. Lower sales and big tech investments could slow the overall performance of the auto industry this year.