27 Issue 1, 2023 California Auto Outlook Comprehensive Information on the California Vehicle Market Volume 19, Number 1 Released February 2023 Covering Fourth Quarter 2022 TM Publication Sponsored By: Positives Outweigh Negatives for 2023 Sales Outlook; New Vehicle Market Predicted to Improve California New Light Vehicle Registrations and U.S. New Vehicle Sales 2021 and 2022 Annual Totals TWO YEAR PERSPECTIVE Historical data source: AutoCount data from Experian. *2023 forecast by Auto Outlook. California Annual New Light Vehicle Registrations - 2008 thru 2023 ANNUAL TRENDS Supply chain issues persisted last year and vehicle production cutbacks were significantly higher than projected at the beginning of the year. New light vehicle registrations in the state declined 10.2 percent from 2021 to 2022. National new vehicle sales fell 7.9 percent. State registrations are predicted to approach 1.76 million units this year, a 5.5 percent improvement from 2022. Here is a review of key positives for the market in 2023. Pentup demand is accumulating as new vehicle sales remain below baseline levels. Auto Outlook estimates that approximately 770,000 new vehicle purchases will be postponed since the onset of the pandemic in 2020 through the end of this year, about 43 percent of sales in an average year. In addition, vehicle transaction prices will move lower as supplies become more in-line with demand. These two factors will give a boost to the market that should offset the negatives listed next. Here are the primary negatives for the 2023 outlook. Supply chain issues are lingering and new vehicle affordability is weakening due to high inflation, increasing interest rates, slower economic growth, and falling trade-in values. Household incomes are increasing, but not fast enough to keep pace with inflation. The stimulative impact resulting from pent-up demand will be tempered due to softer economic conditions, but sales rates should still recover from current levels. QUARTERLY RESULTS California Quarterly New Light Vehicle Registrations Percent Change vs. Year Earlier Data source: AutoCount data from Experian. 1.45 1.04 1.17 1.29 1.62 1.80 1.93 2.16 2.21 2.202.152.09 1.64 1.86 1.67 1.76 0.0 0.5 1.0 1.5 2.0 2.5 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23* New vehicle regs. (millions) Years California U.S. 2021 2022 Change 2021 2022 Change Registrations TOTAL 1,856,391 1,667,831 -10.2% 15,059,846 13,865,892 -7.9% Car 624,625 525,008 -15.9% 3,371,420 2,923,551 -13.3% Light Truck 1,231,766 1,142,823 -7.2% 11,688,426 10,942,341 -6.4% Domestic 584,936 605,520 3.5% 6,182,382 6,151,484 -0.5% European 281,524 250,074 -11.2% 1,593,212 1,481,573 -7.0% Japanese 833,993 658,934 -21.0% 5,795,134 4,758,611 -17.9% Korean 155,938 153,303 -1.7% 1,489,118 1,474,224 -1.0% Market Share Car 33.6 31.5 -2.1 22.4 21.1 -1.3 Light Truck 66.4 68.5 2.1 77.6 78.9 1.3 Domestic 31.5 36.3 4.8 41.1 44.4 3.3 European 15.2 15.0 -0.2 10.6 10.7 0.1 Japanese 45.0 39.5 -5.5 38.5 34.3 -4.2 Korean 8.4 9.2 0.8 9.9 10.6 0.7 Source for California new vehicle registrations: AutoCount data from Experian. Source for U.S. sales: Automotive News. 7.8% -15.5% -13.8% -21.6% -11.9% 13.6% 3Q '21 vs. 3Q '20 4Q '21 vs. 4Q '20 1Q '22 vs. 1Q '21 2Q '22 vs. 2Q '21 3Q '22 vs. 3Q '21 4Q '22 vs. 4Q '21 % change vs. year earlier KEY TRENDS IN NEW VEHICLE MARKET
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