Positive Outlook for Dealerships: Q1 2024 Sales Trends Show Industry Resilience
The latest NADA (National Automobile Dealers Association) Market Beat report for Q1 2024 offers some encouraging signs for the automotive industry. Despite a slight dip in the March SAAR (Seasonally Adjusted Annual Rate) compared to February; the overall sales picture is positive:
Increased Sales: The new light-vehicle sales SAAR for March 2024 hit 15.5 million units, a 3.8% increase year-over-year. First-quarter results are even stronger, with the SAAR at 15.4 million units, marking a 7% increase compared to Q1 2023.
Improved Inventory: Crucially, shoppers now have significantly more vehicles to choose from. New light-vehicle stock on the ground and in-transit totaled 2.58 million units in March 2024, a substantial 40.2% jump compared to March 2023.
Key Takeaways for Dealers
These figures point towards a few key implications for dealerships:
Affordability and Incentives: The combination of rising inventory and OEM incentives has led to a decrease in average transaction prices. While the average vehicle price in March 2024 came in at $44,186 (down 3.6% compared to last year), average incentive spending per unit reached $2,800, marking a significant 66.6% year-over-year increase. Dealerships should be prepared to leverage these incentives to attract buyers.
Hybrids on the Rise: The alternative-fuel vehicle segment continues to grow, reaching an 18% share of total new vehicle sales in Q1 2024. Conventional hybrids are leading the charge with an 8.6% share and an increase of 2.4 percentage points year-over-year. This underscores the importance of adapting our inventory to meet growing demand for fuel-efficient options.
Steady Growth Expected: While inventory might fluctuate over the next few quarters, the NADA anticipates that it will reach around 2.7 to 2.8 million units going into 2025. This, combined with rising sales figures, results in a positive outlook for the year, with a forecast of 15.9 million units for all of 2024.
Adapting to the Market
These NADA figures emphasize the importance of being malleable and nimble. By focusing on a diverse inventory that includes in-demand conventional hybrids, leveraging incentives, and anticipating a continued recovery in overall vehicle sales, dealerships can position themselves for success in the evolving automotive landscape.
By:
Delano Palmer
Director of Training and Development
Innovation Financial Services
Powersports, Marine & RV Business Consultant & Management Trainer
1yFran O'Hagan - always great information, thsnk you. Seeing the same thing with MRAA's Certification Program for Marine dealers. They are driven to improve their follow-ups.