Average US Car Sales Price Down 3.6% From a Year Ago
In the first three months of 2024, new vehicle sales rose some 5% despite high interest rates. However, electric vehicle sales slowed due to foreseen wariness towards limited charging infrastructure.
Automakers reported selling 3.8 million vehicles in the first quarter, with a projected annual sale rate of 15.4 million cars.
J.D. Power said the average sales price in March was the largest recorded decline for the month of March at $44,186, down 3.6% from a year ago. Decreased prices are attributed to the unwillingness of consumers to buy new cars in the current market.
The expected 47% growth of electric vehicles sorely missed the mark, as growth for the quarter just hit 2.7%. The slowdown is attributed to Tesla, confirming automakers’ fears that they pursued EV’s too quickly.
Those buying EV’s for the environment and fuel efficiency purposes have already invested, and now automakers must turn the tide of every-day consumers, Edmunds Director of Insights Ivan Drury said.
“That’s where all of those headwinds come in that we’ve seen in survey data,” Drury said. “Those real-world concerns about charging infrastructure, battery life, insurance costs.”
Experts like Cox Automotive Chief Economist Jonathan Smoke cautioned that spring sales might have already peaked as consumers hope for interest rates to be cut later this year.
“Interest rates are still near 24-year highs, and consumers just don’t have the urgency to buy, with the expectation that rates will be lower later this year,” he wrote in a market report. Automobile interest rates still are averaging around 7% per year.
Drury said vehicles that are more affordable are selling faster than more expensive ones. Sales of many large and expensive SUVs fell during the quarter as companies faced more frugal buyers.
“Small sells, whether it be size or the sales price,” Drury said.
Leading by example, General Motors’ Chevrolet sold 37,588 Trax small SUVs in the quarter, a 500% increase from 2023. At $21,500, the Trax outsold the entire Cadillac brand.
General Motors, Stellantis, Kia and Tesla all reported declines despite the trend that most brands reported strong year- over-year increases.
Toyota reported a large sales increase, 20%, for the quarter. Honda said its sales increased 17%, while Nissan and Subaru both posted 7% increases. Hyundai reported an increase of just 0.2%.
Tesla global sales were off nearly 9%, which they blamed on factory changes to build an updated Model 3, shipping delays and an attack that knocked out power to its factory in Germany.
