U.S. Vehicle Sales (January 2023)

U.S. vehicle sales rise to start 2023

• U.S. vehicle sales rose 17.7% month-on-month (m/m) to 15.7 million (annualized) units in January. This was slightly above the consensus forecast which called for a gain to 15.5 million.
• Unadjusted sales volumes were 1.03 million units or 4.2% above year-ago levels. The average daily selling rate was 43,042 – calculated over 24 days – up from January 2022's 41,316 daily rate.
• Passenger vehicle sales increased 2.9% year-on-year (y/y) while sales of light-trucks ticked up by 4.5% y/y. Light-trucks accounted for 80% of last month's sales, roughly equal to its share in January 2022.   

Key Implications

• Vehicle sales began 2023 with a notable uptick, but the 20-month seasonally adjusted annual rate (SAAR) high was in part due to fewer year-end holiday deals and extreme weather events which likely pushed some purchases into the new year. Moving forward, the SAAR is expected to moderate slightly as seasonal trends recede but should remain above last year's level.
• On the supply side, inventory levels are expected to gradually improve this year as easing supply constraints alleviate production bottlenecks. This should help to satiate some of the pent-up demand in the market, however higher interest rates, a slowing labor market, and an existing inventory mix that skews towards higher price models will prevent a full return to pre-pandemic sales levels this year.       

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