Anticipated Rise in New Car Sales Signals Recovery for U.S. Automotive Industry

Market Daily Staff 2 on February 12, 2024

Image Commercially Licensed From: DepositPhotos

The U.S. automotive industry is poised for a modest upturn in the coming year, with new car sales projected to experience a slight increase. This positive trajectory reflects a gradual return to normalcy for the sector, rebounding from the disruptions caused by the global pandemic and supply chain challenges since 2020.

Forecasted Growth in New Car Sales:

Forecasts from prominent automotive data firms indicate a year-over-year growth ranging from 1% to 4%, with anticipated sales reaching approximately 15.6 million to 16.1 million vehicles. This surge would mark a significant rebound from the low point in 2022, where sales dipped to less than 14 million vehicles—the lowest in over a decade.

Market Dynamics:

The expected rise in new car sales is not only a promising development for consumers but also carries potential economic benefits. Increased vehicle production could alleviate concerns regarding affordability, especially in the face of inflation, high-interest rates, and record-setting new vehicle prices.

Insights from Industry Experts:

According to Jessica Caldwell, Head of Insights at Edmunds, the upcoming year holds the promise of enhanced inventory and appealing deals for consumers. However, the lingering impact of high-interest rates is anticipated to introduce conflicting dynamics to the market.

Shift in Pricing Power:

Edmunds suggests that the peak in pricing power for automakers has passed, driven by improved inventory levels leading to a resurgence of incentives in the market. While increased sales are positive for investors, the simultaneous decrease in prices and the rise in incentives pose potential challenges for automakers and dealers accustomed to record profits in recent years.

Considerations for 2024:

As automakers contemplate the evolving supply-demand equilibrium, questions arise about their willingness to push sales volumes closer to pre-pandemic norms. Jessica Caldwell underscores this by stating, “Automakers specifically will weigh one other key consideration in 2024.”

Global Comparison:

S&P Global Mobility forecasts a 2.8% year-over-year increase in global auto sales, setting the stage for what Colin Couchman, Executive Director of Global Light Vehicle Forecasting, calls a “cagey recovery” in 2024. This contrasts with the expected sequential growth in U.S. sales, marking the first since 2015-16.

Diverse Forecasts:

Projections for U.S. new vehicle sales in 2024 vary among industry experts. S&P envisions sales reaching 15.9 million units, GlobalData forecasts a nearly 4% increase to 16.1 million units, while Edmunds anticipates a more conservative 1% uptick to 15.7 million units.

Cox Automotive’s Perspective:

At the lower end, Cox Automotive expects 15.6 million vehicle sales, driven primarily by an increase in fleet or commercial sales. Chief Economist Jonathan Smoke highlights the expectation of constrained sales growth, emphasizing a return to a more normal trajectory compared to the tumultuous past three years.

Takeaway:

The anticipated rise in new car sales signals a positive shift for the U.S. automotive industry, reflecting a gradual recovery from recent challenges. As the market prepares for potential growth in 2024, industry players must navigate evolving dynamics, considering both opportunities and challenges.

Ash Khandelwal Highlights the Massive Potential in the Automotive Industry Urging Investors to Invest Now Rather than Later

Market Daily Staff on December 23, 2022

Every growing industry greatly rewards early adopters. The difference between good investors and great investors lies in their ability to recognize the potential opportunities in an emerging market, allowing them to capitalize on the latest movements and developments bubbling to the surface.

With recent automobile trends, the industry has become ripe for the taking. Further exacerbated by the ongoing transition to electronic/autonomous vehicles, asset-backed lending programs, and seamless car purchasing technologies, any investor worth their salt would recognize the underlying potential in this thriving industry.

These are the sentiments of Ash Khandelwal, the chairman, and CEO of the private equity fund Ash Capital. Seeing the growing demand for advanced automotive technology, the firebrand entrepreneur urges other investors to capitalize on the emerging market before it’s too late.

Ash Capital is no stranger to success in the automotive industry. Known for focusing on vehicle wholesale and exotic rental companies, the company has seen tremendous revenue from Khandelwal’s remarkable insights.

By diving into these automotive sectors, Ash Capital and its investors have reported an average investor annual yield of 15%. The company’s latest investment in the industry grew from $250,000 in revenue for 2021 to a whopping $13,046,430.70 by Q3 2022. The company projects these numbers to soar by the end of Q4, adding $3.25 million more to the already massive valuation.

As a leader in the automotive technology space, Ash Khandelwal highly prioritizes the further expansion of his company into these sectors as he foresees even more industry growth in the near future. To do this, Ash has heavily invested in a robust network of long-term relationships in the automotive industry to help scale his company’s investment and continue to raise the average investor’s annual yield per annum.

Ash Khandelwal firmly believes that the automotive industry will become more prominent than ever before. As of writing, the automotive sector has already seen a spike in government support for electric vehicles to make way for more sustainable global efforts in curbing the harmful effects of fossil fuels. “Many countries worldwide have set ambitious targets for adopting these technologies and are implementing policies to support their growth,” shared Khandelwal.

There’s also the fact that consumers nowadays are trending towards more socially responsible products. As a result, there is a growing customer demand for electric vehicles as concerns about climate change and pollution continue to grow. “More and more consumers are looking for environmentally friendly transportation options,” explained Khandelwal. “Electric and autonomous vehicles offer a clean and convenient alternative to traditional fossil fuel-powered cars and are becoming increasingly popular among consumers,” he added.

Ash Khandelwal also cited the rapid technological developments in the automotive industry as a key reason investors should flock toward the sector as soon as possible. Investors could choose to fund the development of the latest cutting-edge technologies that will inevitably shape the future of the automotive landscape, allowing them to reap the benefits of the ongoing market transition.

Ultimately, Ash Khandelwal bears witness to a massive opportunity in the automotive industry. Prioritizing the development of the industry above all else, he predicts vast returns for his company’s investors and urges others to follow suit. This is only the beginning of the evolution of the automotive industry.

These developments have been a long time coming, but we are now finally feeling the effects of this inevitable transition. It’s only a matter of time before the entire world recognizes the potential of this growing market. While the rest of the world lies in wait, investors who take advantage of this opportunity now will be well-positioned to capitalize on the growth of the automotive technology and lending markets.