J.D. Power and GlobalData said in a joint report on Friday that they expect new-vehicle retail sales in the U.S. to witness a 1.8% dip this month as compared to January 2023 despite the month having one more selling day this year.
What Happened: According to JD Power President of Data and Analytics Thomas King, January’s sales pace has slowed after touching the strongest sales pace in years in December. Last month, the increased sales pace was a result of increased discounts from manufacturers who were looking to clear their inventory, he added.
Furthermore, popular electric vehicles that were previously eligible for a federal EV tax credit of $7,500 do not qualify starting Jan. 1. This is owing to a change in rules of eligibility which took effect at the onset of the year. As a result, EV buyers might have also made their purchases in December, the report noted.
"Average new-vehicle retail transaction price is declining mostly due to shifts to smaller and more affordable segments that have increased in availability,” King said while adding that transaction prices for the month are trending towards $45,106, down $1,636 from January last year. Retail buyers will spend only $37 billion on new vehicles, down 0.7 billion from the corresponding month last year.
The firms now expect retail sales of 862,445 units in January 2024, down from the 1,197,943 units reported in December.
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Image: Unsplash/ Lenny Kuhne
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