GM: US Sales Show Good Consumer Demand at the Expense of Fleet Sales

Higher inventories and more discounting continue to bring consumers back to showrooms this year, with March US light-vehicle sales up by 4.6% year over year. Wards put the seasonally adjusted annualized selling rate at 15.49 million, up from 14.93 million in March 2023. The chip shortage is mainly behind the industry, so inventories are at their highest levels since early 2021, which, in turn, is bringing incentives off ultralow levels as a percentage of the average transaction price. Per Cox Automotive, incentives have recently trended at nearly 6% of ATP, about double the rate in early 2023 but still far below prepandemic levels in the low teens. We expect continued inventory growth and higher incentives, which, combined with a possible interest rate cut or cuts this year, may fuel higher demand.