California’s new car dealers looking for their best sales year since the pandemic struck the economy might be challenged by a flat start to 2024.
My trusty spreadsheet looked at a first-quarter sales report from the California New Car Dealers Association tracking retail purchases of light trucks – including pickups and SUVs – and cars.
Dealers sold 376,338 vehicles in the quarter, up a slim 0.6% in a year. That’s 270,330 light trucks, up 4% in a year vs. 106,008 cars, down 8% in a year. These “trucks” continue to gain share vs. sedans, nabbing 72% of sales to start 2024 vs. 69% a year ago.
California buying was sluggish vs. the rest of the nation. There were 3.4 million sales elsewhere in the US, up 11% in a year. That included 2.8 million light trucks, up 13% in a year vs. 605,447 cars, up 3% in a year. Trucks were 82% of the US market vs. 81% a year ago.
Look, California wallets were tight as 2024 began with plenty of economic hurdles, including interest rates on four-year auto loans at 8.6%, by one measurement – the highest since 2001.
How challenging is car buying affordability? March’s average US sales price of $47,000 equals 37 weeks of a typical US worker’s pay – a 16% jump in four years, according to Cox/Moody’s data.
The resulting shopper skittishness is found in the association’s sales forecast, too: It now foresees 1.82 million California sales for 2024 – a drop of 10,000 from a previous projection.
Still, if the new estimate proves correct, that would be a 3% increase vs. 2023 and just below the 1.89 million sales of pre-pandemic 2019.
Geographically speaking
California’s muted sales have a northern tint to it. Look at five regions, ranked by the quarter’s one-year sales change …
Northern California, minus the Bay Area: 55,029 sales, down 1.4% in a year – trucks up 0.5% vs. cars off 7%.
San Francisco Bay: 73,265 sales, dpwn 1.4% in a year – trucks up 5% vs. cars off 15%.
Southern California, minus Los Angeles, Orange, San Diego counties: 69,045 sales, up 0.1% in a year – trucks up 2% vs. cars down 5%.
LA-OC: 143,438 sales, up 2% in a year – trucks up 6% vs. cars down 7%.
San Diego: 35,561 sales, up 5% in a year – trucks up 8% vs. cars down 3%.
Badge watch
California’s hot brands to start 2024, with sales increases of 10% or more, included Rivian (up 87% vs. 2023), Dodge (76%), Lexus (37%), Lincoln (26%), Volvo (22%), Honda (19%), Cadillac (17%), Infiniti (15%) and Mazda (14%).
Brands with double-digit declines were Jeep (down 31%), Chevrolet (off 21%), Ram (off 17%), Genesis (off 15%), and Subaru (off 12%).
And the buzz was Tesla’s 8% sales decline – though the electric automaker still has California’s top-selling vehicle, the Model Y, and the No. 6 Model 3.
E-slice
Californians lethargically bought vehicles powered by electricity: 162,285 sales, up just 0.5% in a year.
Lowered government incentives were a factor. How that buying broke down …
All-electric: 90,296 sales, up 0.6% in a year.
Hybrid: 56,291 sales, down 0.4%.
Plug-in hybrid: 15,698 sales, up 3.8%.
Sound bite
“Pent-up demand should provide a boost to sales for at least the rest of this year,” the association’s report says. “Elevated interest rates are keeping loan and lease payments high, but rising incentives have stabilized transaction prices.”
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]