The second half of 2024 is predicted to see a decline in U.S. auto sales.

• Cox Automotive anticipates that U.S. sales growth will decrease in the second half of 2024, resulting in a total of 15.7 million units, which is a 1.3% increase from the previous year.
• As vehicle inventory levels rise, incentives intensify, and uncertainty surrounds the economy, interest rates, and the U.S. presidential election.
• While it's beneficial for consumers who have been waiting to buy a new car, it presents a challenge for automakers.

The auto industry is projected to experience a 2.9% increase in sales during the first half of the year, but there are worries that the industry may struggle to maintain this growth rate in the second half.

Cox Automotive reports that vehicle inventory levels are expanding, incentives are intensifying, and there is mounting uncertainty in the second half of the year regarding the economy, interest rates, and the U.S. presidential election.

The auto data and research firm anticipates a 1.3% increase in sales to 15.7 million units in the second half of 2024, with growth primarily driven by commercial sales rather than consumers.

"Cox chief economist Jonathan Smoke stated during a mid-year review briefing that the economy is expected to experience some weakness in the upcoming months. However, he emphasized that this is not a collapse and that they are making assumptions about maintaining a slower pace."

Good for consumers

The current situation is advantageous for consumers, as they can finally buy a new car after waiting for years due to the abundance of new vehicles and high prices during the pandemic.

Automakers have been facing challenges in maintaining their record profits due to the high demand and low availability of new vehicles during the global health crisis. Wall Street predicts that vehicle pricing and profit challenges will be more significant for most automakers compared to the record or near-record levels of years past.

"Charlie Chesbrough, Cox's senior economist, expressed concern during the briefing that the second half of the year may not maintain the growth seen so far due to the uncertainty that lies ahead, which could make recent sales successes difficult to build upon."

The rental, commercial, and leasing sectors are experiencing a significant increase, while Cox predicts that the retail sector's share of the overall industry will decrease by approximately 9 percentage points from 2021 to about 79%.

Winners and losers

According to Cox, the sales "winners" through the first half of this year are expected to be and.

If Toyota maintains its growth, it could potentially surpass GM as the leading automaker in the U.S. for the first time in 2021.

Sales are estimated to be down 14.3% for underperformer and 16.5% for another underperformer through June. Despite this, Honda outperformed Stellantis in U.S. sales during the first half of the year, pushing the Chrysler and Jeep parent to No. 6 in sales, down from its recent No. 4 rank.

Earlier this month, Stellantis CEO Carlos Tavares admitted that he and the company made "arrogant" mistakes in the U.S. operations, which resulted in sales declines, bloated inventories, and investor concerns.

The end of the seller's market, defined by higher supply, will lead to a further decline in new vehicle grosses and dealer profitability, as Smoke stated.