Cox Automotive released its Q1 2023 new-vehicles sales forecast on Monday.
The company predicts a 6% year-over-year (YoY) increase in new-vehicle sales volume in Q1 2023, reaching 3.5 million units. March sales are expected to reach nearly 1.3 million units, a 2.6% increase compared to March 2022. The Q1 seasonally adjusted annual rate (SAAR) is forecasted at 15.0 million, over 6% higher than the 14.1 million SAAR in Q1 2022.
Improved new-vehicle inventory levels, up by approximately 70% from early 2022, and a significant increase in fleet activity have driven the growth in sales. Fleet sales saw a 58% YoY increase in January and a 48% increase in February, with similar growth expected for March.
“The stronger start to 2023 has led us to make positive revisions to our vehicle sales forecasts, but we continue to believe supply constraints and affordability issues will put a ceiling on what’s possible in the year ahead,” said Cox Automotive Chief Economist Jonathan Smoke.
General Motors (GM) is projected to be the top new-vehicle seller in the U.S. for Q1, while Tesla is expected to surpass a 5% market share for the first time—for cars in general and not just electric vehicles. Tesla’s Q1 sales are forecasted at 180,000 units, a record quarter and an almost 40% increase from Q1 2022.
Tesla’s lowering of prices in January sparked demand and the company is expected to be the top luxury car seller in the U.S. for Q1, with numbers more than double that of traditional automakers BMW or Mercedes.
Following the robust start to 2023, Cox Automotive has raised its full-year new-vehicle sales forecast to 14.2 million, a nearly 3% increase from 2022. However, high prices and average auto loan rates above 8% are anticipated to hinder new-vehicle sales.
“The Q1 result is surprisingly strong given all the bad economic news. But we expect the upside market experienced in Q1 won’t last throughout the year,” added Charlie Chesbrough, Senior Economist at Cox Automotive.
Fleet sales for the full year of 2023 are projected to reach 2.2 million, a 23% increase from 2022. All percentages are based on raw volume, not daily selling rate. There were 75 selling days in both Q1 2022 and Q1 2023, points out Cox Automotive.