Auto Market Predictions for 2023 

The auto market has been uneven since the onset of the pandemic back in 2020. That year, light vehicle sales plummeted due to a variety of issues including mandatory lock downs, chips and part shortages, supply chain challenges as well as employment fluctuations for buyers. There was an uptick in 2021, but then again in 2022 we saw a slump in car sales with covid surges. However, auto market sales are expected to increase in 2023 as things start to even out across the board. 

Here’s what’s in store for the car buying market in 2023. 

Easing of the chip shortage

Today’s vehicles rely on electronic parts. Without these, the vehicle simply won’t run. That’s why the semiconductor shortage that led to the chip shortage had a huge impact on new vehicle production. However, the chip shortage should start to ease at the end of this year allowing for a boost in production in 2023. It’s forecasted that in 2023 global car production will be up 7 percent, with a full recovery anticipated in 2024. 

Supply chain might still be slow

Vehicle sales are part of a global economy. Parts and the vehicles themselves are manufactured on the global supply chain, and that means that global events can impact vehicle supply. J.P. Morgan notes that COVID-19 outbreaks in China as well as the Russian-Ukraine conflict have affected auto supply chains and production this year. These will continue to impact production and delivery of autos to the U.S. in 2023, so makers might need to push delivery dates of new vehicles. Patience will be important in 2023, particularly when reserving/pre-ordering a new vehicle.  

Pre-owned vehicle prices will level out

As you may have read in our previous blog, pre-owned vehicle prices have seen a jump with high demand and low supply. However, global vehicle production will be up in 2023 which will lower the need for pre-owned vehicles to supplement the new car market. This will cause prices on pre-owned vehicles to level out, and in many cases fall back to pre-pandemic pricing. 

EVs will see a significant wave of adoption

Electric vehicles (EVs) will see a surge in adoption in 2023. Recent improvements in EV technology and mileage range have made them a very appealing purchase, especially considering current gas prices. EVs offer a wide array of benefits and now there are options in a variety of vehicle types. Global EV sales are expected to increase 20 percent year-over-year in 2023 and generate $462 billion in revenue. 

The 2023 Auto Market

It’s been a few tough years for the auto market and for buyers. However, 2023 looks to be a promising year with many of the challenges of the past few years easing. This coming year will be a good time for a vehicle purchase, as there will be a stronger, more even supply of vehicles.  

Do you have big plans for a vehicle purchase in 2023?

Connect with a sales associate at any of our Ontario Auto Center dealerships to learn more about 2023 vehicle options.