U.S. auto sales in the first half of the year are projected to increase by 2.9% compared to the same period last year, according to Cox Automotive. However, concerns are emerging about whether this momentum can be sustained through year-end. Factors such as rising vehicle inventories, increasing incentives, and economic uncertainties, including fluctuating interest rates and the upcoming U.S. presidential election, are contributing to this cautious outlook. 

Cox Automotive anticipates a slowdown in sales growth over the next six months, forecasting total sales to reach 15.7 million units, a modest 1.3% increase from 2023. Unlike previous years, the growth is driven primarily by commercial sales rather than the more profitable consumer market. Jonathan Smoke, Cox’s chief economist, noted that while the market is expected to soften, a significant downturn is not anticipated. 

This environment presents a mixed picture. Consumers may benefit from the growing vehicle supply and increased incentives, especially after facing limited availability and high prices during the pandemic. However, for automakers, this trend signals a challenge. Many companies have enjoyed record profits due to the high demand and limited supply during the global health crisis, but sustaining such profitability may become difficult as market conditions shift. 

Wall Street has already forecasted potential declines in vehicle pricing and profitability. According to Charlie Chesbrough, Cox’s senior economist, maintaining the current sales growth through the second half of the year could prove challenging. 

Notably, General Motors, Toyota, and Honda are expected to be the top performers in the first half, while Tesla and Stellantis are predicted to underperform. Stellantis, in particular, is working to correct strategic errors in its U.S. operations that have led to declining sales and investor concerns. 

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