Inflation has had a direct impact on the consumer thought process of buying vehicles and is expected to come down at the end of 2024/the start of 2025.
Inflation combined with consideration of wages and disposable income raises questions for consumers, including whether to buy a used car or a new car. NFDA’s Driving Digital 2024 discussed the impact of this on consumer confidence.
Owen Edwards of Grant Thornton UK began: “Inflation has caused us as consumers to seriously think about what we’re doing and what we’re spending on. That has had an effect on consumer confidence. How confident are we of the future?”
Consumer confidence is returning and the market continues to grow, although it’s not “massive” growth. Grant Thornton UK expects demand will pick up in 2025.
Edwards suggests that OEMs are seeing prices come down but productivity and the capacity of the plants are still “not up to the requirements that they need”. Pushing more vehicles out into the market is required in order to make profit.
As a result of activity and performance seen in Q1, Cox Automotive says baseline forecasts for 2024 suggest registrations will surpass two million cars with potential to stretch beyond 2.2 million.
This positivity stems from a strong start to the year for new car registrations, up 10.4% year on year in Q1.
