Car sales in 2023 are set to remain below levels from before the pandemic for a fourth year as consumers turn cautious, inflation bites and interest rates surge.
Deliveries are expected to reach about 85 million vehicles, LMC Automotive said. That compares to about 90 million deliveries in 2019, the year before the coronavirus pandemic shuttered dealerships and kept people home.
“Demand is no doubt softening as the global economic outlook deteriorates and customers’ appetites for making a big-ticket purchase, such as a new car, are tempered,” said Jonathon Poskitt, LMC’s director of global sales forecasts.
“Pre-pandemic global market volumes are not forecast before 2024, with risks remaining skewed to the downside, particularly given the potential for a much harder economic downturn,” Poskitt said in a report published on Wednesday.
Car sales have stayed below 2019 levels after surging demand for consumer products cleared out global inventories of semiconductors, forcing manufacturers to idle plants.
With few cars available, and manufacturers like BMW, Ford and Stellantis concentrating production on their biggest money-spinners, car prices have surged.
While automakers are still working down long waiting lists, prices are set to ease as household budgets come under pressure and protracted supply-chain issues improve. In the U.S., the price of the average car has reached $46,000.
“As Europe and North America head into the winter months, economic prospects look increasingly dismal in the face of stubbornly high inflation, and underlying demand for new vehicles is inevitably being eroded, ” LMC said.
For this year, LMC’s sales forecast is now five million units lower than before Russia’s invasion of Ukraine that triggered another wave of supply-chain disruption.
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