In spite of rosy predictions about new car sales returning to pre-pandemic levels in 2023 – the downturn is over, and happy days are here again – the market has been anything but happy. First-quarter sales were stronger but the ride is still bumpy.
New Car Sales In 2023
New car sales hit the skids in February – down 5% from January.
There’s more inventory available now because car makers have pumped up production. But high prices and rising interest rates are gobbling up sales.
The average price of a new vehicle is nearly $50,000.
“It seems buying a new vehicle is the domain of the wealthy right now,” said Morningstar auto expert David Whiston.
March is normally the month when sales rev up, Sales of new vehicles in the U.S. are expected to go up in March, riding on pent-up demand for cars and trucks, J.D. Power-LMC Automotive reported.
Total new-vehicle sales for March 2023, including retail and non-retail transactions, are projected to reach 1.33 million units, a 6.2% increase from March 2022, according to Reuters.
Some industry analysts say it is better to wait until the fall because prices and interest rates may get lower.
ELECTRIC VEHICLE SALES 2023
The big exception was Tesla, with an increase of 43.6% from February 2022. This gives Tesla an astounding 5.2% of the U.S. market share.
Steven Loveday, senior editor at InsideEVs reports that the electric car maker racked up nearly 50,000 new registrations in the States, which is a massive lead over second-place BMW, with around 31,000 registrations.
The Model Y was Tesla’s best-selling vehicle for the period, which is to be expected since it saw a $13,000 price drop for the new year. Of the ~50,000 new Teslas registered in January 2023, nearly 29,000 were Model Ys, which marks a 56% increase year over year. Model 3 registrations were up 29%, to 17,526 units sold during the same time period.
The average price of a new electric vehicle is around $64,000.
Here are the best-selling EVs:
- Tesla – 484,351 (up 41%)
Model Y – 228,312 (up 35%)
- Ford – 56,464 (more than doubled) and 7.5% share
Mustang Mach-E – 38,469 (up 50%) and 5.1% share
Ford F-150 Lightning – 12,804
- Chevrolet – 36,245 (up 41%) and 4.8% share
Bolt EV/Bolt EUV – 36,245 (up 41%)
FORD ELECTRIC VEHICLE SHOCK
On March 23, 2023, Ford announced their Project Model E’s cumulative three-year loss from 2021-2023 is $6 billion, including a loss last year of $2.1 billion. But the company expects its first generation of EVs, including the F150 Lightning and Mustang Mach E, to be profitable on a pretax basis by the end of 2024.
HOW 2023 IS STACKING UP
Here are the top 5 new vehicle sales at the end of February 2023:
- The Ford F-Series truck is still king of the road. Ford F-Series trucks (up 21.5% from February 2022)
- Chevrolet Silverado (down 0.3% from February 2022)
- Tesla Model Y (up 46.2% from February 2022)
- Ram Pickups (down 24.6% from February 2022)
- Toyota RAV4 (down 10.5% from February 2022)
- Nissan Rogue (up 110.4% from February 2022)
HEADING INTO SUMMER
According to Cox Automotive, a majority of dealers view the 2023 Q2 auto market as strong. Although high-interest rates and a declining economy may darken the outlook. Overall, interest rates are now the top factor holding back dealer business in the U.S., with 55% noting it as their primary concern.
Car buyers who are expecting lower prices are in for a long wait. Auto manufacturers have dropped many incentives so prices will remain high. The best advice if you want a new car or truck – buckle up, bite the bullet, and pay the high price, or hold your nose and buy used.