Car Sales Surge by 5.4% Indicating a Robust Economic Environment

Mar 02, 2024 02:32 AM EST

PHOTO CARS ON ROAD — (Photo : PEXELS/Quintin Gellar )

The United States' new automobile and truck sales increased 5.4% in February, indicating a strong economy. The annual rate of 15.8 million, as revealed by Ward's Intelligence, exceeded the prediction of 15.4 million economists. The slow start in January, attributed to bustling holidays and severe weather conditions, was compensated by a notable surge in December sales. Analysts believe that some postponed purchases from January contributed to the robust February figures, signaling consumer resilience amid challenging weather conditions.

Car Sales Up by 5.4 % in February

Market Watch reports that in 2023, new car sales in the US hit a four-year high of 15.5 million. Sales are expected to rise in 2024 despite a noticeable rise in interest rates. but with some initial months' purchase restrictions. A predicted reduction in interest rates by the Federal Reserve later in the year could help boost sales in the interim. Given their significant influence on retail sales and consumer spending overall, automobile sales are a reliable gauge of a robust economy.

Available data indicates that consumer spending stayed strong in the second half of the previous year, and that purchasing momentum continued into the first quarter of 2024. Predictions indicate that the economy will grow at a healthy pace of three percent a year or more, indicating a solid trajectory.

As reported by FinMaster, S&P Global Mobility documented that the volume of US light vehicle sales between January 2023 and February 2023 totaled 2.13 million units. Forecasts within the industry project a range between 14.1 million to 15 million vehicles for 2023 US auto sales, indicating a notable and dynamic market landscape.

Across the US, the average cost of a new car across all market segments was $48,763 in February 2023. Consequently, this indicates a slight decrease from the amount of $49,468 in January 2023. Over the same period, non-luxury vehicles sold for an average price of $44,697.

Despite the fact that the average transaction price for luxury automobiles in February 2023 was $65,534, more than two out of every ten cars (19.5%) sold in the US fell into the premium class, providing information about customer preferences within the sector. In addition, the average transaction price in February 2023 was $58,385 for new electric automobiles in the US, underscoring the evolving nature of the automotive industry.

January Car Sales, Volume

As per Marklines' report, in January 2024, the month comprised 25 selling days, while January 2023 had 24 days for sales. Notably, passenger car sales experienced a 1.4% increase to reach 221,594 units, securing a market share of 20.6%.

According to the recent monthly sales data, sales at General Motors dropped by 10.7%. While sales at Ford increased by 4.7%. Similarly, throughout the same time frame, Stellantis' sales performance dropped by 10.9%.

According to Marklines' January 2024 report there is an array of models among the best-selling vehicles. Popular cars including the Ford F-Series, Toyota RAV4, Tesla Model Y, Chevrolet Silverado, Ram Pickup, Honda CR-V, Toyota Camry, Ford Explorer, GMC Sierra, and Honda Civic were on the list; it represented a variety of trucks, SUVs, and sedans that buyers were drawn to throughout the month.