It’s Spring Selling Season, As Many Dealers Eye Unsold Cars And Trucks – Forbes

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For the most compelling reason of all — unsold new cars and trucks are starting to pile up on dealer lots — the U.S. auto retail industry is gearing up for an active Spring selling season, with an uptick in discounts.

“More supply has resulted in the return of discounts and incentives,” said Charlie Chesbrough, senior economist for Cox Automotive, in a recent conference call.

Incentives helped lift U.S. auto sales in March, forecasters said, part of a modest and gradual increase in discounting. The auto industry began to recover to more-normal inventories last year, after an acute shortage of new vehicles since the onset of the pandemic, and a shortage of computer chips and other parts-supply problems.

Estimates for March sales are running around 1.4 million to 1.5 million cars and trucks combined. That’s a solid improvement over March 2023. Sales are expected to increase correspondingly for the first quarter.

A joint forecast from J.D. Power and GlobalData predicts March sales of about 1.5 million, up about 12% vs. a year ago. Another forecaster, S&P Global, expects March sales just below 1.5 million, an increase of about 7% vs. a year ago.

S&P Global says March 2024 would be only the second time since May 2021 monthly sales exceeded 1.4 million.

When demand was high and new-vehicle inventory was low — inventory fell below 1 million units for much of 2021, less than a typical month’s worth of sales — automakers and dealers didn’t have to worry so much about affordability.

Today they do, with high interest rates and higher inventory. According to J.D. Power, the average new-vehicle retail transaction price in March is an estimated $44,186. That’s down 3.9% vs. March 2023.

Meanwhile, J.D. Power says retail inventory is an estimated 1.7 million units at the end of March. That’s up 4.2% vs. the end of February 2024, and a 39.3% increase vs. March 2023.

“The trends are pretty clear, vehicles need to become more affordable,” said Thomas King, president of the Data & Analytics Division, and Chief Product Officer at J.D. Power, in a March 26 presentation at the New York Auto Forum.

The Auto Forum was sponsored by the National Automobile Dealers Association, J.D. Power, and the Greater New York Automobile Dealers Association. The New York City-area dealer association hosts the New York International Auto Show, which is open to the public March 29 to April 7.

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