The latest Chicago Auto Outlook (always available in the Member Section of the CATA Website) forecasts a rise in vehicle registrations over the next 12 months. Supply chain issues persisted last year, and vehicle production cutbacks were significantly higher than projected at the beginning of the year. New retail light vehicle registrations in the area declined 19.2% from 2021 to 2022. National market fell 14.9%.

According to the baseline forecast, area registrations are predicted to approach 280,000 units this year, a 6.3% improvement from 2022. See sidebar to right for alternative upside and downside projections.

Pent-up demand is accumulating as new vehicles sales remain below baseline line levels. Auto Outlook estimates that approximately 140,000 new vehicle purchases will be postponed since the onset of the pandemic in 2020 through the end of this year, about 48% of sales in an average year! In addition, vehicle transaction prices are likely to drift lower as supplies become more in-line with demand. These two factors will give a boost to the market that should offset the negatives listed next.

Supply chain issues are lingering, and new vehicle affordability is weakening due to high inflation, increasing interest rates, slower economic growth, and falling trade in values. Household incomes are increasing, but not fast enough to keep pace with inflation. The stimulative impact resulting from pent up demand will be tempered due to softer economic conditions, but sales rates should still recover from current levels.

Among the top 25 sellers in the area market, Tesla, BMW, Kia, Hyundai, and GMC had the largest percentage gains (or smallest declines) in registrations from 2021 to 2022. Brand results in 2022 were almost entirely a function of vehicle inventories, not the typical determinants of new product launches and marketing.

EV market share in the area increased from 3.0% in 2021 to 5.7% last year. Electric vehicle share has increased by 4.6 share points from 2018 to 2022. Top five selling models last year were Toyota RAV4, Honda CR-V, Hyundai Tucson, Chevrolet Equinox and Tesla Model Y.

Click to download the latest Chicago Auto Outlook.