New vehicle sales in January 2025 are projected to reach 1,105,900 units, reflecting a 4.4% year-over-year growth, according to J.D. Power and GlobalData. Retail sales are expected to account for 904,200 units, an increase of 4.8% compared to the same period last year. The seasonally adjusted annualized rate (SAAR) for new-vehicle sales is anticipated to rise to 15.6 million units, up by 0.6 million from January 2024.
While the average retail transaction price (ATP) for new vehicles is slightly down by 0.5% to $44,636, total consumer spending on retail purchases is projected to reach $38.5 billion, a 5.3% increase and the highest January figure on record. Inventory levels continue to climb, with retail inventory expected to hit 2.2 million units, a 31.1% jump from last year. However, this increase has led to higher discounts from manufacturers and retailers, causing retailer profit per unit to decline by 13.5%.
Incentive spending is expected to rise significantly, with an average spend of $3,226 per vehicle, up 29.3% year-over-year. Leasing has contributed to this trend, representing 24.3% of retail sales, despite a sharp 36.7% drop in expiring leases.
Electric vehicles (EVs) remain a growing focus. In December 2024, EV retail share reached 10.5%, supported by federal tax incentives and strong demand. Although EV sales grew by only 0.7 percentage points year-over-year in 2024, the average EV transaction price of $45,700 was slightly lower than that of hybrid and gas-powered vehicles. Battery electric vehicles (BEVs) continue to see robust demand entering 2025.
Globally, the automotive market is on an upward trajectory. December 2024’s global light-vehicle selling rate reached 96.0 million units, the highest since August, with annual sales totaling 88.6 million units—up 2% from 2023. Sales in 2025 are projected to climb by nearly 4%, reaching 91.7 million units, driven by strong demand from regions such as China and India. However, potential tariffs could pose a risk to U.S. sales, potentially raising prices and affecting global momentum.
In the used-vehicle market, average prices have declined by 1.2% year-over-year to $27,794, with trade-in equity dropping to $7,636. Despite lower prices, demand for used vehicles remains steady, contributing to a balanced market outlook.
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