U.S. auto sales are expected to slow during the second half of 2024

U.S. auto sales through the first half of the year are expected to be up by 2.9% compared to a year ago, but there are concerns that the auto industry may not be able to continue that momentum through year-end.

Vehicle inventory levels are growing, incentives are increasing and there’s growing uncertainty surrounding the economy, interest rates and U.S. presidential election, according to Cox Automotive.

The auto data and research firm expects sales growth to slow in the next six months to 15.7 million units, roughly a 1.3% increase from 2023. And, unlike in recent years, growth is coming from commercial sales rather than more profitable consumer sales.

“Overall, we’re expecting some weakness in the coming few months,” said Cox chief economist Jonathan Smoke during a midyear review briefing Tuesday. “We basically are making some assumptions that we can’t quite hold the pace that we’ve been seeing. But we’re not expecting a collapse either.”

Good for consumers

Such circumstances are largely good for consumers, some of whom have been waiting years to purchase a new vehicle amid unprecedented supplies of new vehicles and record prices during the coronavirus pandemic.

But those circumstances are a headwind for automakers, many of which posted record profits due to the high demand and low availability of new vehicles during the global health crisis. Wall Street has been predicting challenges in vehicle pricing and profit for most automakers compared to the record or near-record levels of recent years.

“There’s a lot of uncertainty that lies ahead, and it may make recent sales successes hard to build upon,” Charlie Chesbrough, Cox’s senior economist, said during the briefing. “We are concerned that the second half of the year cannot maintain the growth we’ve seen so far.”