Amid an uncertain economic outlook, the automotive industry has much to be optimistic about with March’s auto sales performance. With year-over-year new vehicle gains and most major automakers seeing growth, the present looks bright.
What is the margin of success, and which automakers benefit from the positive headwinds? Take a look at March’s 2023 auto sales results.
Year-Over-Year New Car Sales Almost Hit 6%
New vehicle sales volume is expected to have a 5.7% year-over-year rise for Q1 2023. March is expected to see an 8.6% year-over-year sales volume rise. This performance has put 2023 on track to hit a 15 million annual rate, a steep uptick from last year’s 14.1 million. Units sold in March hit 1.366 million.
While there are quite a few reasons we’re seeing this renewed success (that we’ll explore in more detail below), according to Cox Automotive, high fleet sales and the replenishment of vehicle inventory are giving dealers and automakers the boost they need to see positive results.
Most Automakers See Positive Automotive Results
Most automakers saw a well-performing March and Q1 performance. Here are some of the notable auto sales results for March 2023 and Q1:
- Subaru saw Q1 sales growth of 8.3% and had a March that capped off eight consecutive months of yearly month-over-month growth with an almost 23% rise in sales.
- Tesla’s strategy of slashing its prices impacted sales, as they experienced 5% growth in the first quarter.
- Hyundai’s significant sales growth of models like the Elantra HEV (74%), Santa Cruz (30%), and many others led them to a 27% year-over-year increase in March sales.
- Honda had its best sales month since July 2021. Q1 sales rose 6.8%, while March sales increased 8%.
- Kia’s Q1 sales rose 15% compared to last year. March also showed large year-over-year sales growth, with a 19.8% increase.
- General Motors’ strong pricing and robust inventory helped them to have a 17.6% rise in Q1 sales.
- Toyota was one of the only automakers that didn’t see a sales boost. They experienced a 9.1% decline in sales in March and an 8.8% Q1 drop in 2023.
Automakers are doing well in March and throughout the first few months of the year. However, what contributes to this sales boost? Are there any elements having a greater impact than others? There could be quite a few reasons for these performances.
Results Defy the Current Economic Landscape
While there have been fears of recession and a seemingly rocky economic landscape, the auto sales results defy these concerns. Individuals are still buying cars even though the average loan rate for a new vehicle is 9%, and listing prices are above $47,000.
A lack of affordability doesn’t seem to tank demand. Nevertheless, some notable factors are likely contributing to this sales rise. Automakers may be focusing more on individuals who can afford these prices, and there was a higher share of luxury buyers in Q1. Additionally, automakers are likely targeting production toward their more profitable and expensive cars.
Even though inventory is returning and supply chains are straightening out, budget-conscious car buyers will likely be pushed out of the automotive market if current trends continue. Automakers’ audience and vehicle production choices seem to be driving this sales success, but will there be a need to pivot later in the year? We’ll learn more as 2023 continues to unfold.
