Added Supply, Fleet Gains Likely to Boost New Vehicle Sales

New-vehicle sales in February are forecast to show a modest gain when announced next week, an improvement over last February’s supply-constrained market, Cox Automotive reported Feb. 22. Sales are expected to increase nearly 4% from last year and last month – a true volume gain by comparison since there are 24 selling days in each month.

However, the February 2023 auto sales pace, or seasonally adjusted annual rate (SAAR), is expected to reach 14.4 million, a decline from January’s surprisingly strong 15.7 million level. With elevated auto loan rates and persistent inflation, a sales pace decline from January was expected.   

Affordability is a growing headwind for vehicle buyers but is affecting new and used sales differently as the spring season approaches. 

“We have diverging markets today," said Charlie Chesbrough, senior economist at Cox Automotive, in a news release. "New-vehicle prices remain high while used retail prices are now in decline. New inventory is slowly stabilizing while used supply is falling. However, I wouldn’t be surprised to see this situation change later in the spring. With many affordability-seeking vehicle buyers leaving the new market for the used, dealers may find they have too little used inventory, and price declines may reverse. And, OEMs may find they have too much new-vehicle inventory and be forced to be more aggressive with incentives to boost sales.”

February 2023 Sales Forecast Highlights

• Light vehicle sales are expected to finish near 1.105 million, a 3.9% rise from last month and a 4% increase from February 2022.
• The SAAR in February 2023 is estimated to be 14.4 million, above last February’s 13.7 million level but down from January’s 15.7 million pace.
• Fleet sales are expected to show strong year-over-year gains over February 2022’s inventory-limited market.
• February 2023 has 24 selling days, equal to both February 2022 and January 2023.