After four years of pandemic-driven turbulence, the U.S. auto market is set to finally return to normal, according to Cox Automotive’s Forecast: 2024

“A decade from now, when we look back at the years immediately following the global pandemic of 2020, we’ll be awed by the dramatic swings and unprecedented circumstances the economy and auto market endured,” wrote Jonathan Smoke, who was recently promoted from Cox Automotive’s chief economist to SVP of Cox Enterprises.

“To name a few, we saw historic appreciation in vehicle values, unimagined drops in supply and interest rates moving from all-time lows to 23-year highs at an unforgiving pace.”

For marketplaces, this normalization will mean helping dealers succeed in a slow-growth market, the company asserts.

“Marketplaces will have a huge impact for dealers, as 2024 is shaping up to be fiercely competitive, and growth is predicted to be limited,” Lisa Aloisio, director of public relations at Cox Automotive Retail Solutions, told the AIM Group. Aloisio’s business unit runs car sites Autotrader.com and KBB.com.

The main takeaways from the forecast:

  1. Slow growth expected but not a recession: Economic growth will be sluggish due to continued high interest rates and expected declines in job openings and income growth. On the other hand, loan rates may come off their two-decade high, which would boost vehicle affordability.
  2. Increased vehicle supply, lower prices: Anticipated rises in new-vehicle inventory might lead to moderate price declines. While new-vehicle sales are expected to rise, the growth in the used vehicle market is likely to be minimal. 
  3. Shift from a seller’s to a buyer’s market: Dealerships face challenges due to escalating vehicle costs, potentially squeezing profits. However, margins for used vehicles and fixed operations are expected to endure.
  4. Electric vehicle market expansion: The electric vehicle (EV) market is poised for expansion, with an anticipated increase in models, incentives, advertising and sales efforts. Sales of EVs are expected to surpass one million units, aided by federal incentives, and they will be the fastest-growing segment within wholesale.
  5. Normalization of the car buying experience: 2024 is expected to bring better deals, a return to discounts for new vehicles and an improved, more efficient customer experience at dealerships.
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