New and Used Vehicle Sales Projections February 2023

Report Highlights - February 22, 2023

• Annual new-vehicle sales pace in February is expected to finish near 14.4 million, up 0.7 million from last February’s 13.7 million pace but down from January’s 15.7 million level.
• Improved inventory is expected to contribute to a true volume gain compared to February 2022’s supply-constrained market.
• February sales volume is expected to rise 4.0% from one year ago and reach 1.105 million units. This is also a 3.9% increase from January, which also had 24 selling days.

The Cox Automotive February new-vehicle sales forecast is out today. It's been posted in the Newsroom, and will be shared widely via the newswires later today.

Our Industry Insights team is forecasting an increase in sales volumes, both month over month and year over year. While we recognize affordability issues are keeping overall sales in check, an improved inventory situation and greater fleet sales will result in a sales volume gain for new vehicles. The seasonally adjusted annual rate of sales (SAAR) will drop some from January's surprise but is expected to show a healthy increase from 2022.

Hitting the forecast SAAR of 14.4 million in February would be a solid result by standards set in 2022, but a long way from the routine 16s the market posted in 2019. New-vehicle payments remain in the stratosphere, keeping market volume in check. Thanks to a record share of luxury brand sales, new-vehicle transaction prices were up 6% year over year in January and are still near $50,000.  

The used-vehicle market is in a very different place. As Senior Economist Charlie Chesbrough notes in our forecast release, "We have diverging markets today. New-vehicle prices remain high while used retail prices are now in decline. New inventory is slowly stabilizing while used supply is falling."

The used-vehicle market right now is showing surprising strength. Wholesale price declines seen in Q4 2022 are now working their way into the retail market. As the team notes, "Some price decline post-holidays is normal, but deflation is now hitting the used-retail market. Retail prices are down roughly 5% from last year, and that's helping boost activity." Used-vehicle sales are relatively strong, up 8% over last year. Why? Part of the reason is more new-vehicle shoppers are in the used market, due to lower relative prices.

Used-vehicle days' supply has been dropping throughout 2023, unlike new inventory, and dealers are heading into the spring selling season with tightening supply. The team does not expect the good news on prices or sales to continue. Data from our Manheim operations indicate wholesale prices are increasing again, as dealers work to restock the shelves. On Friday last week, we posted the mid-month Manheim Used Vehicle Value Index. And on Monday, Senior Director Jeremy Robb provided important context to the report in his video: Manheim Market Insights Series: Episode 6. 

In many ways, the U.S. auto market is two very different markets: New and Used. Yes, both are sizable, high-revenue operations, centered on matching willing buyers with available vehicles. And both are complicated, fickle and difficult to forecast. At times, they march in an identical direction. At other times – right now, for example – the markets head off on diverging roads. The only certainty: There will be more shifts in the months ahead. 

As always, thanks for your time. If you want to connect with anyone at Cox Automotive, reach out to our very capable PR Team. We'd be happy to help. 

Cheers,