(Reuters) – Uncertainty looms over the U.S. auto industry, fueled by expectations that the presidential elections in November will reshape the economy, affect interest rates or influence inflation levels, a report from Cox Automotive showed on Tuesday.
Cox forecast that new-vehicles sales volume in the first half of 2024 will rise by 2.9% year-over-year and held its full-year forecast steady at 15.7 million.
WHY IT’S IMPORTANT
Consumers in the U.S. have been reluctant to make big-ticket purchases like vehicles due to inflationary pressures. Shoppers may continue to hold back due to economic uncertainty stemming from the presidential election, the report says.
KEY QUOTES
“If shoppers believe interest rates will be lower in the future, or that the economy will be improving – or worsening – post-election, they are more likely to stay on the sidelines, waiting for the dust to settle,” said Vanessa Ton, senior manager at Cox Automotive.
“There is a view from consumers now that if they wait, they’re going to get a better price,” Charlie Chesbrough, senior economist for Cox Automotive, said in a media briefing on Tuesday.
BY THE NUMBERSBoth shoppers and dealers believe that inflation is the top concern, with 74% of consumers and 81% of dealers believing the next election will influence it.
However, auto dealers are divided on the impact of the election on vehicle sales, with about 38% expecting sales to worsen, and 31% each who expect sales will either improve or remain the same.
WHAT’S NEXT
About 41% consumers believe that vehicle prices will rise due to the election, while 33% believe it will have no impact on prices, according to the report.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Shailesh Kuber)
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