2023 Was Great For Car Sales, 2024 Probably Won’t Be

Good morning! It’s Wednesday, January 3, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

The Chrysler 300C Ends Production

1st Gear: 2023 Will Be Hard To Follow For Car Sales

U.S. new vehicle sales likely rose by a low double-digit percentage in 2023 on the backs of demand for crossovers and pickup trucks, but the ride may end in 2024. Analysts say high interest rates are eating into new car demand.

Automakers boosted output to keep up with high demand following the pandemic, but demand is now easing as we get into 2024. From Reuters:

Industry consultant Cox Automotive called 2023 “a surprisingly strong sales year” but added “high vehicle prices and high interest rates remain the industry’s Grinch right now, and that trend will continue into next year.”

Car dealers had to offer generous incentives and discounts in December to clear older inventory.

Full-year sales in 2023 are expected to be up 12% at about 15.5 million units, according to Cox. Consultants J.D. Power and GlobalData have forecast a 13.2% increase for the period.

“This is the third consecutive year in which U.S. consumers spent more than half a trillion dollars buying new vehicles,” J.D. Power said in a report last month.

Internal combustion-powered vehicles weren’t the only ones seeing a sales boost. Electric vehicle sales are expected to have risen as well. Tesla, the best-selling EV maker in the U.S., reported a 38 percent rise in 2023 deliveries.

Not everyone is going to share in the fun though. Stellantis is expected to post a 1.4 percent drop in sales last year. This doesn’t really matter though. Stellantis is more of a vibes-based company, anyway.

2nd Gear: Nissan, GM Warns Of Trump’s IRA Plans

Automakers like General Motors and Nissan are warning that former president Donald Trump’s plan to get rid of the Inflation Reduction Act will hurt the growth of U.S. electric vehicle sales.

The IRA is meant to be a driving force behind EV manufacturing in the U.S. The measure, which is intended to stop consumers from buying Chinese technology, has sparked tens of billions in investments into the U.S. from battery companies and automakers. From the Financial Times:

But in November, Trump’s senior campaign officials and advisers told the Financial Times that he was planning to overhaul US policy during a second term. As the growth of EV sales slow, and carmakers pull back on some spending plans, industry executives now fear that without the incentives EV sales will stumble.

General Motors chief financial officer Paul Jacobson said the IRA had “tremendous benefit” to the EV market, helping stimulate sales. “We don’t want to end up saying this vehicle program is really good with the IRA, only to have the IRA go away, and now suddenly, the vehicle can’t make money.”

Nissan chief executive Makoto Uchida, whose carmaker has two plants in the US and who previously said “the world needs to move on” from internal combustion engines, said that the measures helped drive EV sales in the country “in the medium to long term”.

He stressed he did not want to comment on the politics of the measure, but added that the “penetration of EVs will be much more promising with that kind of act”.

EV sales made up 9 percent of all new vehicle sales in the first nine months of 2023, and the Biden Administration wants that number to hit 50 percent by the end of the decade. I cannot imagine Trump is desperately worried about what the Biden administration is aiming for.

If there’s one way to own soy boy libcucks, it’s by taking away a $7,500 EV tax incentive. That’s for sure.

3rd Gear: A December To Remember For Hyundai/Kia

Hyundai and Kia can’t stop winning, folks. Hyundai’s U.S. sales rose for the 17th consecutive month, and Kia set an annual sales record. The twin automakers are killing the game. From Automotive News:

Hyundai said December deliveries rose 4 percent to 75,164, helping to produce record fourth quarter volume of 206,048, up 5 percent, and record annual sales of 801,195, an increase of 11 percent.

Hyundai said its U.S. retail sales have now set records three straight years, driven by improving inventories, more generous discounts, an expanded electric-vehicle lineup and popular crossovers. U.S. sales of the Tucson, Hyundai’s top seller, rose 20 percent to 209,624 last year, marking the first time deliveries of the compact crossover have topped 200,000.

The company said it ended December with 69,097 cars and light trucks in U.S. inventory, down from 73,923 at the close of November but up sharply from 37,379 at the close of 2022.

Kia snapped a 16-month streak of sales increases with December volume of 60,275, down 147 units, but the company easily set an annual sales record of 782,451, up 13 percent from 2022. Two of Kia’s top sellers — the Sportage and Telluride crossovers — posted lower sales in December.

Genesis racked up its 14th straight monthly gain, with December volume rising 10 percent to 6,803. The luxury brand’s U.S. sales rose 23 percent to an all-time high of 69,175 last year.

Hyundai Motor Group is expected to surpass Stellantis as the number four seller in the U.S. in 2023, only falling behind General Motors, Toyota and Ford. HMG was beating Stellantis in U.S. sales by about 62,000 vehicles through the first three quarters of 2023. It’s okay, Stellantis. I still love you. Money isn’t everything.

4th Gear: VinFast To Set Up Indian Battery Plant

Vietnamese electric vehicle maker VinFast is set to open its first manufacturing plant in India, where it will build batteries. The facility is expected to be built in the southern state of Tamil Nadu. The information comes from a number of sources who spoke with Reuters, but it couldn’t get official confirmation from VinFast or the state. From Reuters:

The company will make batteries for EVs at the plant in the city of Thoothukudi, one of the people said, adding that this was separate from its previously announced plans to assemble vehicles shipped in parts from Vietnam.

[…]

“Several VinFast officials have visited Thoothukudi district in Tamil Nadu to check out sites,” a fourth source, a senior official directly involved in the matter, said on Tuesday.

Reuters reported in September VinFast had begun hiring for sales, legal and back office jobs in India, seeking recruits who “dare to think, dare to do, and dare to face difficulties.”

It is not immediately clear what the size of the investment is or when a VinFast factory will become operational in Tamil Nadu.

In October of 2023, VinFast said it would build assembly factories in India and Indonesia, and each of them would have a capacity of up to 50,000 vehicles per year and capital expenditures of up to $200 million initially. Production isn’t supposed to start until 2026

Separately, Green SM, EV taxi operator, mostly owned by VinFast’s founder, also plans to establish in India, the world’s third-largest automotive market, VinFast CEO Le Thi Thu Thuy told Reuters in October.

VinFast is also open to bringing both e-scooters and e-cars to India, the first source said.

Tamil Nadu’s capital city Chennai, dubbed the Detroit of Asia, and other districts already are host to several EV players including Indian two-wheeler makers Ola Electric and Ather as well as China’s BYD.

We know VinFast can (sort of) build cars, but it remains to be seen if it can sell them with any real volume in the U.S.

Reverse: Hell Yeah, Delaware

Neutral: The Electric City

Photo: Andy Kalmowitz / Jalopnik

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