Rivian’s showroom in Laguna Beach, Calif. (Getty Images)
U.S. new- vehicle sales are expected to rise about 13% in December from a year earlier, driven by strong discounts and vehicle availability, industry consultants J.D. Power and GlobalData said in a joint report on Thursday.
Total new-vehicle sales, which include retail and non-retail transactions, are estimated to reach about 1,396,700 units in December, a 13.2% increase from a year ago, according to the report.
The automotive industry is set to enjoy a robust year as total sales were just under 15.5 million, a significant 12.8% increase from last year’s sales, the report said.
Inventory levels are also currently at their highest since the early spring of 2021, leaving dealers and automakers scurrying to make way for new models, which are set to pour in by January.
Car dealers are providing generous incentives and discounts during winter sales, aiming to clear stocks of older vehicles and capitalize on sustained demand.
The report estimates incentive spending per unit to reach $2,458 in the month, up from $1,289 last year, encouraging consumers to spend about $50.4 billion on new vehicles, up by $2.4 billion.
“Sales growth for December is being enabled by improving vehicle availability and affordability,” said Thomas King, president of the data and analytics division at J.D. Power.
However, the increase in new-vehicle supply and higher interest rates are resulting in falling per-unit dealer profits, although those profits continue to exceed pre-pandemic levels, the report added.
The average transaction price (ATP) in the United States for new vehicles in December is expected to be $46,055. The ATP was $47,362 for the same period in 2022.
The report projected global demand to grow by 3%, to 92.3 million units, in 2024.