New Market Outlook Report says car buying will get better in 2024, really

When it comes to economic predictors Figuring It All Out, there are a ton of hurdles to get over. Some of them are: America's size and economic diversity, the abstractions inherent in any economy, the variety of economic indicators that attempt to make the abstractions concrete, and the many, complex ways analysts can mix and match those indicators to translate them into predictions. To make a point and an example, we've been hearing, "It's finally getting better!" for two years. And it has, in ways. But the latest data from Kelley Blue Book indicates the average transaction price of a new car is still over $48,000, where it's been for at least 18 months. There is more new-car inventory and there are more incentives; on the other hand, a number of popular vehicles cost $5,000 to $10,000 more than they did in 2022. Supply chains are better, but quite a few automaker configurators still show warnings about unavailability before letting you build a vehicle. Interest rates are up. And a regular-sized bag of Cheetos at my local grocery store in the cheap Midwest is still more than $5.

It's possible that the analysts have meant, "It's not getting worse nearly as quickly as it used to," which certainly counts as getting better. But a new market assessment from automotive M&A advisory firm Dave Cantin Group (DCG), the "U.S. Retail Automotive 2024 Market Outlook Report," (MOR) says this time it's really going to happen. CEO Dave Cantin told Autoblog, "What’s unique about 2024 is the convergence of multiple factors that favor the consumer materializing throughout the year: a stronger than expected economy and job market, declining interest rates throughout year, inflation continuing to decline and increasing dealer inventory levels."

In this reading, the past 12 to 18 months have been building into "a more sustainable, slow move toward favorable consumer conditions because of true shifts already underway that will continue throughout 2024."

The report is aimed at dealers and sales outlets looking for tips on what to expect from 2024 and how to navigate it. We appreciate that the report begins with an honest assessment of the starting conditions: "More than one executive (OEM, supplier, or dealership) publicly describes the results since COVID as 'better than we deserved.' Indeed, over the past 3+ years it seems like everyone won – everyone, that is, except the consumer (who has paid higher prices for fewer choices, longer lead times and more competition to get a vehicle at all)."

And skipping ahead to the conclusion, the bittersweet news can be summed up as, "On balance, the industry is entering 2024 expecting a 'new normal' that won’t look quite as attractive as it did in 2023, but better than it did (for manufacturers and dealerships) in 2019. The CEO of a leading private dealership put it this way: 'At the start of 2023, we said we’d be happy with 80% of our 2022 results. We’re saying it again this year – and this time we mean it.'"

Won't be as bad as it has been, won't be as good as it used to be.