US Luxury Car Sales Fall 46% in 2024

Sales of luxury vehicles priced over US$100,000 have decreased by 46% in the US this year, according to a report from CarGurus, an automotive research and shopping company based in Boston. Consumers appear to be opting for more affordable and reliable vehicles without the luxury price tag, data shows.

The report highlights a significant change in the automotive market. While vehicles priced between US$80,000 and US$90,000 and those priced between US$90,000 and US$100,000 saw marginal increases of 1.3% and 4.2%, respectively, the demand for vehicles below US$60,000 has surged. Meanwhile, purchases of vehicles priced between US$20,000 and US$30,000 increased by nearly 44%.

In the used vehicle market, the trend continues, with sales of cars priced between US$15,000 and US $20,000 rising by 62.6% compared to the previous year. Conversely, sales of used vehicles above US$30,000 have dropped significantly, with vehicles in the US$40,000 to US$50,000 range experiencing a 30.5% decline. However, purchases of used vehicles priced over US$100,000 saw a decrease of 1.4%.

The average price for a vehicle reached US$47,870 in August, according to Kelley Blue Book. Notably, sales of new vehicles between US$30,000 and US$40,000 and those between US$40,000 and US$50,000 have increased by 33% and 20%, respectively.

“As we near the end of 2024, it is clear that consumers are speaking loudly with their wallets. After years of post-pandemic revenge spending, consumers are becoming more prudent as they face economic uncertainty, still-high interest rates, and vehicle prices that remain elevated,” Kevin Roberts, CarGurus’ Director of Economic and Market Intelligence, stated.

According to Quartz, despite a generally strong US economy, consumer sentiment has shifted, particularly in an election year. Finding affordable vehicles has become increasingly challenging, however. The few models still priced under US $20,000, such as the Mitsubishi Mirage and Nissan Versa, have seen increased demand in 2024.

This trend presents an opportunity for Mexico, as many models experiencing growth are manufactured there and exported to the United States. For instance, the Tiguan, produced at Volkswagen's Puebla plant, has exported 103,142 units in 2024, reflecting a production increase of 23.6%. Additionally, following the pause in Kia Río production, the Forte has emerged as Kia’s most exported model, with 96,858 units exported from the Pesqueria plant in Nuevo Leon, thereby gaining significant traction across the Americas.

Morgan Stanley Analyst Adam Jonas noted that vehicle affordability in the United States is “very stretched,” with average monthly payments reaching US$700. MarketWatch reports that car payments should not exceed US$675 per month for individuals earning US$6,000 monthly after taxes.

Luxury vehicle sales in Mexico also faced challenges, falling 4.7% between January and August 2024, according to insights previously shared in Mexico Business News. This marks the largest drop since 2020, with data from INEGI indicating that 20,102 luxury vehicles were sold during this period. Guillermo Rosales, Executive President, AMDA, highlighted a growing preference for SUVs among consumers, reflecting a broader trend away from traditional luxury sedans toward more versatile vehicle options.