145,994 131,911 144,300 151,500 2021 Actual 2022 Actual 2023 Forecast 2024 Forecast Covering Third Quarter 2023 Released October 2023 San Diego Auto Outlook Comprehensive information on the San Diego County new vehicle market Market Summary Forecast for County New Retail Light Vehicle Registrations Domestics consist of vehicles sold by GM, Ford, Stellantis (excluding Alfa Romeo and FIAT), Tesla, Rivian, and Lucid. Data sourced from Experian Automotive. YTD '22 YTD '23 % Chg. Mkt. Share Sept. Sept. '22 to '23 YTD '23 TOTAL 98,823 107,924 9.2% Car 28,474 30,946 8.7% 28.7% Light Truck 70,349 76,978 9.4% 71.3% Domestic 32,280 38,896 20.5% 36.0% European 15,495 15,125 -2.4% 14.0% Japanese 40,231 42,865 6.5% 39.7% Korean 10,817 11,038 2.0% 10.2% The graph above shows annual new retail light vehicle registrations in 2021 and 2022 and Auto Outlook’s projections for 2023 and 2024. Historical data sourced from Experian Automotive. UP 12.9% vs. ‘20 DOWN 9.6% vs. ‘21 UP 9.4% vs. ‘22 UP 5.0% vs. ‘23 Pent-up demand is growing. New vehicle registrations since the onset of the pandemic have been well below average. And although sales recovered from the low point of the recession in 2009, it took several years for the market to rebound. The pent-up demand that accrued between 2009 and 2015 had barely been released before the pandemic and ensuing supply chain issues boosted the total again. Pent-up demand will support new vehicle sales for several years. Employment and household incomes are strong. As mentioned on the right, recession is still a possibility and affordability has weakened, but the unemployment rate is low and wage growth is steady. Impressive array of new products. Today’s new vehicles offer significant improvements compared to the average 10 year old car. Aside from the fact that their current vehicle may be wearing out, advances in safety features, performance, alternative powertrains, and infotainment are all factors luring shoppers into dealerships. Interest rates are high. The prime interest rate has increased by more than five points during the past three years, placing significant upward pressure on vehicle loan and lease payments. Vehicle prices are high. Average transaction prices moved higher last year due to supply chain issues, inflationary pressures, and higher vehicle content. Escalating prices and higher rates have weakened vehicle affordability, which will be an issue holding back sales. Soft landing not guaranteed. Most economists expect growth to remain positive despite higher interest rates, but this is not a sure thing. The economy is essentially at break even right now, and it wouldn’t take much to push it to recession. Other threats. After being put on hold since the pandemic hit in March of 2020, student loan payments are restarting, gas prices are high, excess household savings have been depleted, and if the UAW strike lingers, sales could be impacted. FORECAST New Vehicle Market Predicted to Trend Higher During Next Two Years Key factors boosting new vehicle sales Key factors holding back new vehicle sales Key Trends in San Diego County Market » Forecast summary: pent-up demand will provide momentum for the new vehicle market over the next 15 months, while the negative factors will place a ceiling on how high sales can go. » County new retail light vehicle registrations are predicted to increase 9.4% this year and 5.0% in 2024. » Registrations exceeded 36,000 units in the Third Quarter of this year and increased 17.3% versus depressed yearearlier levels. » Battery electric vehicles accounted for 22.4% of the market in the first nine months of this year, up from 15.5% last year. BEV share decreased slightly from the Second to the Third Quarter of 2023, however (see page 4). » Rivian, Buick, Tesla, Honda, and Cadillac had the largest percentage increases so far this year. 24 SAN DIEGO DEALER
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