Auto Industry Ready to Rediscover Its Groove in 2024, Study Claims

After few years of post-pandemic uncertainty, everything is pointing toward 2024 being the year the automotive industry begins returning to normal — with a few caveats. Sales and inventory levels are expected to rise to near pre-pandemic norms while the trends for EVs and hybrids are expected to stay their current course.

Dealer inventories are expected to rise, helping them sell more vehicles to excited new buyers who have been waiting.

A new study, the DCG Market Outlook Report (MOR), suggests that 2024 will put the automotive business back on a path to normalcy with rising sales and inventory levels helping to lead the course correction.

“The last four years have caused monumental changes in the auto industry,” said Dave Cantin, CEO of the Dave Cantin Group, a leading advisory firm to automotive retail groups and their owners. “Dealerships are facing unfamiliar choices, new challenges and the stark reality of normalized profits.

“The Market Outlook Report provides a holistic, big-picture look at the automotive industry that empowers manufacturers, dealers and their advisors to better understand and adjust for current and emerging issues that will directly affect their operations.”

Seven themes

The report uses data collected from a variety of sources to determine what to expect in the year ahead. This year’s report produced seven themes for the industry in 2024.

EV sales aren’t dead, just slow and are expect remain so for a bit longer as more and more improvements are made to the charging infrastructure.

MOR’s seven automotive industry themes for 2024 are:

• Macroeconomics: Soft Landing, Harder Choices – The economy remains better than expected, supporting industry results above pre-Covid levels.
• Consumer Trends: Societal Shifts Solidifying – Changing consumer preferences and behaviors are reshaping the industry.
• Politics and Regulation: Unusually Important in 2024 – The election year promises vigorous regulatory debate, and will determine federal EV policy.
• OEMs and Supply Chain: In the Driver Seat – Automakers retain control of the industry value chain, but their grip is weakening.
• EVs: Extremely Volatile – The rate of EV adoption is moderating, causing widespread production and order adjustments.
• Dealership Trends: Back to the Grind – High-performing dealers will use data, efficiencies to separate themselves from the pack.
• M&A Trends and Forecast: Continued Opportunity – The 2024 auto dealership M&A climate will stabilize, but continue to exceed pre-Covid levels.

“The industry is back to grind in 2024. Inventory is back, the supply chain is not a blocker, and manufacturers are adjusting some of their priorities based on how consumers have pushed back over the past few years,” said Michael Brown, owner of the Empire Automotive Group. “Overall, things look more like they did pre-pandemic and it’s back to business as usual.”

More EV stories

• Ford EV owners getting free Tesla supercharger adapaters
• GM bringing plug-in hybrids to North American market
• EV revolution continues to roll along, analysts say

Early examples

Tesla builds and runs the most reliable network of EV fast chargers in the U.S.

The MOR says EV sales are going to remain flat or grow a slower rate than they did in 2022 and in the first six months of 2023. Many point to concerns about the EV charging infrastructure as well as the roll back of EVs eligible for the federal government’s $7,500 tax credit.

General Motors told investors and analysts during its Q4 and full-year earnings call that it was still reconfiguring its EV production schedule. And while EVs remain at the top of their list in terms of priority, there are other factors that are in play. To ensure they meet looming regulatory mandates, the company plans to expand its use of plug-in hybrids in its lineup. The only current PHEV is has the Chevrolet Corvette E-Ray.

More political factors are expected to play a role in the sale of those vehicles, especially as the presidential election begins to amp up. Sides will be chosen and that could determine if current level of support from the government remains in place.

After few years of post-pandemic uncertainty, everything is pointing toward 2024 being the year the automotive industry begins returning to normal — with a few caveats. Sales and inventory levels are expected to rise to near pre-pandemic norms while the trends for EVs and hybrids are expected to stay their current course.