LAWRENCEVILLE, Ga.—New vehicle sales climbed to 15.4 million units in 2023, a 10% growth over 2022, according to Black Book, which is also reporting a “return to health” of the used vehicle wholesale market.
The findings and other predictions are included in the company’s 2024 Vehicle Depreciation Report titled “Shifting Gears: A Comprehensive Overview of Automotive Trends in 2023.”
Black Book said the detailed report, assemble in conjunction with Fitch Ratings, presents key developments and data from the U.S. new and used vehicle markets, highlighting “notable” trends in depreciation, sales, and fleet performance.
Among the findings:
U.S. New Vehicle Market Insights
- Increased Leasing. Leasing experienced a resurgence driven by incentives and EV sales, though still below pre-pandemic levels.
- EV Market Dynamics. EV sales exceeded one-million units, leading to oversupply and impacted used EV values, notably affecting Tesla’s market share, Black Book said.
- Inflated MSRPs and Incentives. Average new car incentives reached 4.6% of MSRP, a “modest rise but still far from historic highs.”
Used Vehicle Market Trends.
- Depreciation Rates. The used vehicle market experienced a 20.4% depreciation rate, with EVs seeing deeper declines at roughly 30%.
- Auction Performance. Although auction conversion rates dipped to 50%, sales performance improved towards the year’s end, Black Book stated.
- Inventory and Sales. Inventory levels rebounded from 2021 lows, and franchised dealers regained market share.
Market Performance and Projections
- Depreciation. The market confronted significant depreciation in the latter half of 2023, with projections indicating a -18% depreciation rate for 2024.
- High Depreciation Continues. Seasonal patterns saw notable declines, highlighted by a record single-week depreciation of -1.86% in late October.
- ABS Performance and Outlook. Black Book is predicting a return to traditional seasonal behaviors with varied incentives across different OEMs.
EV Market Challenges
- MSRP Reductions. Significant price cuts in new BEVs, particularly by Tesla, affected used BEV market values.
- Remarketing Strategies. “The mismanagement of off-lease BEVs and rental returns led to sharp depreciation,” according to Black Book.
Overall, according to Black Book, the index reflects the health of the used vehicle wholesale market, showing a decline of 10% in 2023, yet is forecasted to remain above pre-COVID levels.
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