Auto Market Update

In 2022 we saw a major increase in the cost of most consumer goods, including new and used vehicles. In addition, inventory shortages pushed the demand for used and electric vehicles to an all-time high. With 2022 coming to an end, do we expect to have a reprieve from the increased vehicle prices caused by market changes? Let’s take a look.

 

While the global supply chain issues have been primarily due to the fallout from the COVID-19 pandemic, other global events such as the war in Ukraine and rising inflation rates, supply chain shortages have continued to impact the production of new vehicles as well. Many automakers have pivoted to alternative production processes to combat these issues. For example, incentives and inventory are now becoming more available. Although, we are not likely to see incentives and inventory revert to pre-pandemic levels just yet.

 

When it comes to used vehicles, prices are beginning to trend downward. Many sources such as JP Morgan and Forbes have indicated that used car prices most likely peaked in 2022. For those searching for a vehicle in 2023 and looking to score a deal, used cars may be a good place to start looking. J.P. Morgan Research has predicted that used car prices in 2023 will drop by as much as 20%.

 

As the world continues to experience the lasting market and economic effects of COVID-19, 2023 is shaping up to be a major transitional period for the auto market. We may start to see  a new normal for the auto market as the demand for fuel alternative vehicles increases, used car prices decrease, and interest rates still on the rise,