(Reuters) - U.S. new vehicle sales are expected to rise 12.1% in March, fueled by strong demand and vehicle availability, according to a joint report by industry consultants J.D. Power and GlobalData on Thursday.
WHY IT IS IMPORTANT
While demand for personal transport has remained resilient, inventory levels have been rising as supply chain issues faced by automakers normalize.
That coupled with intense competition has led manufacturers and dealers to offer bigger discounts, marking a shift to a pre-pandemic trend of higher volumes and lower margins.
BY THE NUMBERS
Total new-vehicle sales for March 2024, including retail and non-retail transactions, are expected to reach 1,525,700 units, a 12.1% jump from a year ago.
Average transaction prices are trending toward $44,186, down 3.6% from March 2023, while average incentive spend per vehicle has grown 66.6% from a year ago and on track to reach $2,800.
Total retailer profit per unit is expected to decline by around 32% in the month.
KEY QUOTES
"While the sales and expenditure performance are impressive, it is coming at the expense of reduced retailer and manufacturer profitability as inventories of unsold vehicles rise and competitive pressures intensify," said Thomas King, president of the data and analytics division at J.D. Power.
"The bias is shifting from low sales volumes, high prices and profits to higher sales volumes, lower prices," King said.