Consumers boosted 2024 U.S. new-car sales to five-year high

By Nora Eckert

DETROIT (Reuters) - U.S. new-car sales in 2024 continued to rise from their pandemic lows, bolstered by replenished inventories and higher incentives, analysts estimated.

Sales are expected to top 15.8 million, the highest level since 2019, with General Motors (NYSE:GM ) defending its 2023 sales crown, they said.

"It's been a volatile year for the new-vehicle market, but it is expected to finish on a high note," said Charlie Chesbrough, senior economist at Cox Automotive.

Those strong sales have been supported by what GM Chief Financial Officer Paul Jacobson called a "remarkably" resilient consumer. The Detroit automaker's sales are near 2.7 million for the year, Cox analysts estimated. 

Automakers will report their final sales tallies throughout the day on Friday.

It was a good year for most major automakers, except for Jeep-maker Stellantis (NYSE:STLA ) and electric vehicle giant Tesla (NASDAQ:TSLA ) which did not notch year-over-year sales gains like the others.

Stellantis had a particularly rocky 2024, with sales of its popular Ram, Jeep and Dodge brands all decreasing, third-quarter company reports show. The French-Italian automaker grappled with fallout from an aggressive pricing strategy that ultimately led to former CEO Carlos Tavares' abrupt departure.

Tesla has faced slowing sales as its lineup grows stale, and competition in China intensifies, eating into an important market for the company run by Elon Musk.

U.S. sales of electric vehicles are expected to approach 1.3 million, or about 8% of all new vehicles purchased, Cox said. Buyers' willingness to go electric crept up slightly from 2023, when U.S. drivers bought 1.2 million EVs, comprising 7.6% of all sales, Cox said.

Customers may have flocked to these battery-powered models more in the fourth quarter as they scrambled to take advantage of EV tax credits, which could disappear under Republican President-elect Donald Trump.

The Trump administration's plans would likely affect auto sales in 2025 and beyond, if the incoming president makes good on plans to roll back Democratic President Joe Biden's EV policies, as well as increase tariffs on imports from Mexico and Canada. 

EASING STICKER SHOCK

Shoppers found more vehicle discounts this winter, J.D. Power found. The average incentive spend per vehicle is expected to grow 30.7% from December 2023 to December 2024, on track to reach $3,442, the firm found.

That holiday shopping energy will likely carry into the new year, analysts said.



"As the positive trends of 2024 continue into 2025, improved overall inventory and greater availability of affordable vehicles are expected to sustain sales momentum," Thomas King, president of the data and analytics division at J.D. Power, said in a statement.

Cox analysts expect new-vehicle sales to grow about 3% in 2025.

Source: Investing.com