For the U.S. auto market, the word that will likely sum up 2024 is “normalcy,” according to Cox Automotive’s Forecast: 2024. Powered by the best data and keenest insights, Cox Automotive developed five themes that offer a collective vision and valuable perspective on the road ahead for the U.S. auto industry. Running throughout the five themes is a welcome return to normalcy after four years of everything but normal, with nothing in the data suggesting surges in any direction, as the industry witnessed in 2021 and 2022.
“A decade from now, when we look back at the years immediately following the global pandemic of 2020, we’ll be awed by the dramatic swings and unprecedented circumstances the economy and auto market endured,” said Cox Automotive Chief Economist Jonathan Smoke. “To name a few, we saw historic appreciation in vehicle values, unimagined drops in supply, and interest rates moving from all-time lows to 23-year highs at an unforgiving pace. The past four years have been chaotic, even by auto industry standards, and have shifted many normal seasonal patterns out of whack, which adds to the difficulty of forecasting what comes next.”
For 2024, the Cox Automotive Economic and Industry Insights team sees the U.S. auto market being steered by five key themes.
1. Slow Growth Ahead, But It Sure Beats a Recession.
Cox Automotive expects that the economy in 2024 will experience weak growth but will not experience a recession. High interest rates and declining inflation will likely continue, limiting consumer spending. Job and income growth may slow down. The labor market, which significantly contributes to vehicle sales in the U.S. market, is expected to weaken. However, unemployment levels will remain low enough to support a healthy auto industry. Meanwhile, wage growth may cool in 2024 but will stay above average.
Although the possibility of higher loan rates is still on the table, the expectation is for rates to come down from record highs in the year…
Read the full article here