Vehicle Portfolio Mix and Fuel Efficiency Improvements Make Current Market Dynamics Different than Previous Gas Shocks
- Total U.S. new-vehicle sales forecast holds at 16.3 million for 2026
- Auto industry has become more resilient to exogenous volatility and shock events
- Q1 seasonally adjusted sales rates (SAAR) historically lag full-year volumes
JD Power, a leading provider of proprietary data, advanced analytics, deep industry expertise and insights that drive the global auto industry, presented an updated auto industry outlook to kick off the New York International Auto Show. The outlook, which maintains the 2026 forecast JD Power presented earlier this year, projects 16.3 million total new-vehicle sales. Delivered as part of the annual Automotive Forum, hosted jointly by NADA, JD Power and the New York International Auto Show, the presentation showcased new data and insights tracking the auto industry’s response to geopolitical and macroeconomic volatility, plus the underlying dynamics driving new vehicle sales.
“The global auto industry has evolved significantly over the past few years, proving its agility and resilience in response to market shocks, and this year is no different,” said Thomas King, president, JD Power OEM Solutions. “Importantly, demand for new vehicles remains robust, despite economic uncertainty associated with the current situation in the Middle East and rising fuel prices. While higher fuel prices are unquestionably impacting the finances of American households, the effect they have on new vehicle buyers is being softened by the improved fuel economy available from today’s vehicles compared to vehicles being traded in. Furthermore, the significant rise in new vehicle prices, and the higher household income required to afford them, indicates that today’s new vehicle buyers are less vulnerable to fuel price volatility than in prior periods.
“There is no doubt that the current situation in the Middle East will make things more difficult to predict over the near-term, and the longer-term risks to auto sales are material, but the fundamentals are strong for a solid year in 2026.”
Following are some of the key observations and data points highlighted in King’s presentation:
- Auto industry more resilient than ever: The auto industry continues to demonstrate increased resilience, supported by more adaptive planning, diversified supply strategies, and improved operational flexibility. These capabilities have strengthened the industry’s ability to respond effectively to shifting conditions.
- Full-year sales outlook holds at 16.3 million units: Monthly new-vehicle retail sales reached 1,120,601 in March 2026, their highest levels of the year, underscoring strong demand for new vehicles despite concerns around fuel prices and economic uncertainty. While year-over-year comparisons are complicated by the market volatility we saw in 2025 following the introduction of tariffs, the underlying health of consumer demand for new vehicles remains solid.
- Used market strength supports trade-ins: The average used-vehicle price is $30,166, up $860 from a year ago. This reflects the continued low supply of recent model-year used vehicles due to lower new-vehicle production during the pandemic. The ongoing strength of used-vehicle prices continues to assist new-vehicle buyers who have a trade-in.
- Affordability challenges create headwinds, but manufacturers have room to move: While demand remains strong, new vehicle affordability is the primary barrier to higher vehicle sales. Average retail transaction prices are expected to rise 2.5% to $45,859 from a year ago. In aggregate, manufacturers’ incentive spend per vehicle is on track to reach $3,325, which is $165 higher than a year ago, suggesting that manufacturers still have more room to incentivize the purchase of new vehicles.
- New vehicle buyers are less vulnerable to fuel price volatility than in prior periods: Even as fuel prices rise, improved fuel economy in newer vehicles has helped keep monthly fuel costs relatively stable for new vehicle buyers. On a relative basis, fuel cost as a percentage of financed monthly payments for gasoline-powered vehicles remains below levels observed four years ago, indicating that today’s buyers are less vulnerable to fuel price fluctuations.
For more information about JD Power solutions for automotive OEMs, dealers and related industries, visit http://www.jdpower.com.
