New-car sales expected to tick higher as inventory climbs and deals more plentiful

By Claudia Assis

The year is shaping up to be the best for new-car sales since 2019

Car dealers are offering more deals as inventories rise, likely boosting April new-car sales as 2024 shapes up to be the best year for new-car sales since 2019.

That's from analysts at Cox Automotive Inc., who said Wednesday that the new-car market "remains on the road to recovery," and that the "healthy" pace confirms their forecast about 2024 being the best year for new-car sales in five years.

Cox forecast a seasonally adjusted annual rate of around 15.9 million vehicles in April, up 200,000 vehicles from April 2023 and up 400,000 vehicles from March's 15.5 million annual rate.

"Healthy inventory levels and rising incentives continue to support new-vehicle sales," the Cox analysts said.

At the beginning of April, the total supply of available new vehicles was up 46% compared with April 2023. Consumers remain resilient despite higher interest rates and vehicle prices, the analysts said.

Tesla Inc. (TSLA) recently underscored the trend of rising inventories. The EV maker, which reported first-quarter earnings late Tuesday, said that its global vehicle inventory, measured in days of supply, went up to 28 days in the first quarter, compared with just 15 days in the previous quarter.

According to Cox Automotive, there were 2.77 million unsold vehicles in inventory in early April, and supply averaged 72 days.

That has translated into better deals at the dealerships, as incentives are slowly coming back after all but drying up in recent years - as the pandemic wreaked havoc on supply chains, car makers scrambled for parts, and prices for both new and used cars skyrocketed amid heated demand.

Earlier in April, Cox said that the average incentive spend from manufacturers increased 11% to $3,121 in March, up 102% from the year before.

Incentives as a percentage of average transaction price increased to 6.6% in March, up from 5.9% in February and more than double the average of 3.2% recorded in March 2023.

-Claudia Assis

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04-24-24 1350ET

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