100,112 108,552 117,454 114,900 2023 Actual 2024 Actual 2025 Actual 2026 Forecast First Quarter 2026 Released April 2026 Market Summary Forecast for State New Retail Light Vehicle Registrations UP 7.6% vs. ‘22 UP 8.4% vs. ‘23 UP 8.2% vs. ‘24 DOWN 2.2% vs. ‘25 Arkansas Auto Outlook Coverage of the Arkansas new vehicle market TM YTD '25 YTD '26 % Chg. Mkt. Share thru Mar. thru Mar. '25 to '26 YTD '26 TOTAL 28,954 28,496 -1.6% Car 3,480 3,311 -4.9% 11.6% Light Truck 25,474 25,185 -1.1% 88.4% Domestic 15,163 14,620 -3.6% 51.2% European 1,582 1,300 -17.8% 4.6% Japanese 8,482 8,795 3.7% 30.9% Other Asian 3,727 3,781 1.4% 13.3% Domestics consist of vehicles sold by GM, Ford, Stellantis (excluding Alfa Romeo and FIAT), Tesla, Rivian, and Lucid. Other Asian includes Genesis, Hyundai, Kia, and VinFast. Data sourced from Experian Automotive. The graph above shows annual new retail light vehicle registrations from 2023 to 2025, and Auto Outlook’s projection for 2026. Historical data sourced from Experian Automotive. FORECAST State New Vehicle Market Predicted to Decline 2.2% in 2026 Key factors boosting new vehicle sales Key factors holding back new vehicle sales Key Trends in Arkansas Market » State new retail light vehicle registrations are predicted to decline 2.2% for all of this year versus 2025. » Registrations in the first quarter of 2026 slipped to 28,496 units, off by 1.6% from a year earlier but above the previous five year average (see page 2). The U.S. market declined 8.5%. » BEV and PHEV registrations fell by more than 30% in the first quarter of this year (see page 6). BEV market share fell to 1.6%. » Among top 25 sellers, Nissan, Toyota, Jeep, Lexus, Hyundai, and Ford had the largest increases in registrations so far this year (see page 5). » Yukon and Expedition are relatively strong performers in the state market (see page 7). Pent up demand. New vehicle sales since the onset of the pandemic have been below average. And the Great Recession of 2009 was called great for a reason: it took nearly seven years for sales to return to normal levels. Due to this extended period of below-average sales, the vehicle fleet is aging (see below). Vehicle purchases have been postponed, which will provide support to the market. Consumers have incentive to upgrade. Average age of vehicles in operation has reached an all-time high. No question, modern vehicles are built better and last longer, but today’s models offer many upgraded features vs. the average 12.5-year-old car. Passive and active safety technology, advanced infotainment options, and alternative powertrains are just a few examples. Many vehicle owners have a strong incentive to upgrade. Declining interest rates? Prior to the Iran war, the prospects were good for interest rates to fall during 2026. But the war and subsequent increases in oil and gasoline prices have brought that into question. Lower finance rates are critical for improving affordability, which is the primary negative for the market. New vehicle affordability. Finance costs remain elevated due to high interest rates, vehicle transaction prices are hovering around $50,000, and income growth is barely keeping pace with inflation. Manufacturers can alleviate price pressures by reducing content levels and offering more affordable models, but these adjustments take time. Tariffs. Higher tariffs will negatively impact new vehicle sales in 2026. Up until now, manufacturers and dealers have largely absorbed the costs, but eventually, consumers will feel the effects. Tariffs also lead to increasing inflation in the economy, which reduces disposable household income. Uncertainty. Forecasting auto sales is always challenging, but the past 15 months have been particularly unpredictable. Unforeseen events like fluctuating tariff rates, the phaseout of BEV tax credits, the war in Iran, and rising gasoline prices have all thrown uncertainty into the outlook. Largely as a result of this ongoing tumult, consumer confidence has plummeted to near record-low levels. Heightened uncertainty makes people reluctant to make big-ticket purchases, like automobiles. 17 Arkansas Auto Dealer
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