{"id":676,"date":"2023-07-25T15:11:34","date_gmt":"2023-07-25T15:11:34","guid":{"rendered":"https:\/\/www.autobuyersmarket.com\/news\/?p=676"},"modified":"2025-05-05T10:25:10","modified_gmt":"2025-05-05T10:25:10","slug":"high-new-car-costs-leading-to-oversupply-prices-expected-to-drop-sharply-soon","status":"publish","type":"post","link":"https:\/\/www.autobuyersmarket.com\/news\/2023\/07\/25\/high-new-car-costs-leading-to-oversupply-prices-expected-to-drop-sharply-soon\/","title":{"rendered":"High New Car Costs Leading to Oversupply: Prices Expected to Drop Sharply Soon"},"content":{"rendered":"\n
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A technician installs an airbag on the assembly line at GM’s Chevrolet Silverado and GMC Sierra pickup truck plant in Fort Wayne, Indiana, U.S., July 25, 2018. File photo: John Gress Media Inc, Shutter Stock, licensed.<\/figcaption><\/figure>\n\n\n\n

WASHINGTON, D.C. – Skyrocketing prices of new cars within the last few years \u2013 driven in part by supply chain issues as a result of the COVID-19 pandemic \u2013 have resulted in many consumers being priced out of the market and instead sinking their money into keeping their current vehicles on the road as long as possible. Due to this new hesitancy on the part of auto buyers, there is now a growing surplus of new vehicles on dealer\u2019s lots that experts are predicting will soon result in prices plummeting in the near future<\/a>.\u00a0<\/p>\n\n\n\n

A new UBS report estimates that the production of new cars globally will outpace sales by as much as 6 percent in 2023; if this comes to pass, it will result in approximately 5 million vehicles that will require year end price cuts to make room for next year’s models. These price cuts will most likely take place near the end of the year, but electric vehicles \u2013 the demand for which has begun to dip more sharply as of late \u2013 are already cutting prices. <\/p>\n\n\n\n

Essentially, experts are expecting a price war to take place in the latter half of 2023, and consumers are expected to come out on the winning end. <\/p>\n\n\n\n

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Given the bullish production schedules, we see high risk of overproduction and growing pricing pressure as a result,\u201d the UBS report said. \u201cThe price war has already started unfolding in the EV space, and we expect it to spread into the combustion engine segment [during the second half of 2023].\u201d\u00a0<\/em><\/p>\n<\/blockquote>\n\n\n\n

Automakers who specialize in family cars such as SUVs are expected to suffer the most from the impending price cuts, whereas luxury cars are expected to hold up better in terms of retaining their value.  <\/p>\n\n\n\n

However, EV makers are anticipating taking a major hit from price cuts later this year due to numerous factors, including an increase in energy costs, lower overall demand due to current technological shortcomings \u2013 such as lengthy charging times \u2013 and the fact that electric-powered cars tend to have high sticker prices that many consumers are simply unable to afford. <\/p>\n\n\n\n

In addition, prices of used cars have also experienced a slight drop as of late; Cox Automotive recently reported that wholesale used vehicle prices in March were down 2.4 percent year-over-year. <\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTON, D.C. – Skyrocketing prices of new cars within the last few years \u2013 driven in part by supply chain issues as a result of the COVID-19 pandemic \u2013 have resulted in many consumers being priced out of the market and instead sinking their money into keeping their current vehicles on the road as long […]<\/p>\n","protected":false},"author":4,"featured_media":677,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-676","post","type-post","status-publish","format-standard","has-post-thumbnail","category-market-updates","entry"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\n\t\t\n