The automotive market is slowly stabilizing thanks to increased new car inventory levels, growing incentives, and new baselines in used and new pricing, according to a Black Book report released this week.
Electric vehicle sales will continue to grow, but industry professionals do not expect a revolutionary change this decade – instead, they forecast gradual market share gains by electric vehicles as the country continues to invest in infrastructure to support electrification.
According to the latest Fitch Global Economic Outlook, the likelihood of a recession in 2024 appears low. The forecast points toward a year of slow-paced economic growth, with the GDP expected to grow at about half the rate of 2023. Despite this, the labor market will remain solid, with unemployment rates projected to increase modestly to around 4.6%. A significant trend is the anticipated reduction in CPI inflation to about 2.6%, which will lead to interest rate cuts by the Federal Reserve in the latter half of the year to stimulate economic activity and offset sluggish growth. Given these positive economic indicators, consumer confidence is expected to improve, thereby enhancing demand for vehicles.
The Black Book’s Seasonally Adjusted Retention Index is set to experience a modest decrease of around 5% by year’s end. However, it is expected to remain at least 25% above pre-pandemic levels despite this decline.
It's going to be a slow process to get market values where they should be, but at least the market is heading in the right direction which will make cars more affordable.
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