One would have to go back all the way to 1960 to find an increase in vehicle sales at the same time as a broader economic recession but 2023 is shaping up to be such a year. PHOTO courtesy Stellantis.
Can 2023 prove to be one of those very rare years where the automotive market booms in the midst of a broader economic recession? Desrosiers Automotive Consultants (DAC) seems to think so and their forecast bears watching for job shops with big stakes in the automotive sector.
“DAC spends a lot of time polishing our crystal ball, and way back last year we forecast that 2023 may indeed be one of the very rare years that sees an increase in vehicle sales at the same time as a broader economic recession. Such occurrences are indeed rare…1960 is an example for the historians amongst you,” DAC says. “With the release of the decidedly weak GDP numbers last week that forecast is looking definitely on track as August new light vehicle sales among reporting manufacturers came in strongly at an estimated 149,697 units, up a rollicking 18.3% from the same month last year.”
DAC cautions that August 2022 was a very weak comparable – the worst August since 1999 – but still the market strength this year is impressive.
“Fueled by improved vehicle availability and pent-up demand from the 1.1 million ‘lost sales’ that never happened in 2020-2022, the market in August performed strongly, making it now ten months in a row that we have seen year-over-year market growth,” Andrew King, Managing Partner of DAC commented. “The SAAR (seasonally adjusted annual rate) for the month came in at 1.65 million units, the highest level we have seen since February and a positive sign of market resilience to date. It will be interesting to see if market momentum can be sustained in the coming months in light of high interest rates, weakening economic performance, and record high new vehicle prices.”
The upbeat numbers in automotive sales are having an impact on job shops, confirms Marc Hasrouny, general manager of equipment distributor Megatel and president of CMTDA.
“Windsor has movement over the last two months. Usually, July and August are slower months but now it’s very busy, projects are on the table and they’re moving forward. It’s a good sign,” Hasrouny told SHOP.