The automotive industry is experiencing a dynamic shift as S&P Global Mobility forecasts that new light vehicle sales will reach 1.34 million units in April 2024. Despite appearing to be a decrease from previous months—7% down from March and 2% down from the previous year—this figure is adjusted for two fewer selling days in March and one less in April compared to their respective months last year. This adjustment indicates a robust sales pace, translating to an estimated 16.0 million units for the seasonally adjusted annual rate (SAAR), marking only the third instance in two years that sales have hit this stride.

Inventory and Incentives: A Balancing Act

The current auto sales environment presents a complex picture. On one hand, inventories are advancing, and incentives are becoming more prevalent. On the other, consumers face affordability challenges due to high interest rates and vehicle prices. Chris Hopson, principal analyst at S&P Global Mobility, interprets the anticipated April results as a sign that consumers remain engaged in the new vehicle market.

Retail Inventory: A Surge in Numbers

Retail advertised inventory has seen a significant uptick, now standing at 2.97 million units, a 65% increase from the previous year. The inventory primarily consists of 2024 models, with some 2025 models and a few older vehicles still available. Matt Trommer, associate director at S&P Global Mobility, notes that consumers are finding more opportunities for discounts due to the increased availability of vehicles in dealer inventories.

Production and Sales: Looking Ahead

The supply side of the automotive equation is showing promising signs of progress. Joe Langley, associate director at S&P Global Mobility, reports that the outlook for North American light vehicle production in 2024 has been revised upwards by 1.5% to 16.0 million units. This revision is based on resilient demand and stronger production results, suggesting a minimized impact from supply chain issues.

Hopson adds that the advancing production levels are setting the stage for further development of incentives and inventory, which could entice new vehicle buyers who have been hesitant due to higher interest rates. However, he cautions that the journey will not be smooth, with expected month-to-month sales volatility. S&P Global Mobility projects a 3% increase in light vehicle sales volume for the calendar year 2024, reaching 16.0 million units.

The Electric Vehicle Trend

The forecast also includes the continued growth of battery-electric vehicle (BEV) sales. While some volatility is expected in the short term, the BEV market share in April is projected to remain steady at 7%, mirroring March’s figures. The market is poised for growth with upcoming launches of models like the Chevrolet Equinox EV, Honda Prologue, and Fiat 500e, all slated for introduction in the first half of 2024, alongside increasing sales of Tesla Model 3 and Cybertruck.

In conclusion, the automotive market in April 2024 is a testament to the industry’s resilience and adaptability. With rising inventories and incentives, alongside a steady climb in electric vehicle sales, the future of the auto industry looks promising, albeit with expected fluctuations along the way.

Pakistan automobile sales hit by multiple factors in Dec’23, PAMA reports