After having fun with a powerful rebound in gross sales in 2023, the auto business seems headed for slower development this yr as customers wrestle with elevated rates of interest and excessive costs for brand spanking new automobiles and light-weight vehicles.

Edmunds, a market researcher, expects the business to promote 15.7 million autos this yr. That might quantity to a modest improve from the 15.5 million offered final yr, when gross sales jumped 12 %.

“There’s undoubtedly pent-up demand on the market, as a result of individuals have been holding off purchases for some time,” mentioned Jessica Caldwell, head of insights at Edmunds. “However given the credit score state of affairs, we don’t suppose the business will see a ton of development this yr.”

For the reason that coronavirus pandemic, automakers have struggled with shortages of important components which have prevented them from producing as many autos as customers needed to purchase. In 2023, the shortages, particularly for laptop chips, lastly eased, permitting manufacturing to return to extra regular ranges.

However over the previous yr, the Federal Reserve has considerably raised rates of interest, which has pushed up prices significantly for automotive patrons.

For years, many individuals took benefit of zero-percent loans to purchase autos, at the same time as costs climbed. However such offers, provided by automakers to maneuver stock, have almost disappeared within the wake of the Fed’s fee hikes. Within the fourth quarter of 2023, new-vehicle gross sales with zero-percent financing accounted for simply 2.3 % of all gross sales, in response to Edmunds.

Month-to-month funds are at near-record highs. Within the fourth quarter, the typical month-to-month fee on new automobiles was $739, up from $717 in the identical interval a yr in the past.

A number of automakers had been hoping {that a} fast rise in gross sales of recent electrical autos would drive the business to positive factors into 2024 and 2025, however these automobiles and vehicles haven’t taken off fairly as rapidly as many analysts and executives had hoped.

In 2023, gross sales of battery-powered fashions in america topped a million autos for the primary time, and Cox Automotive, one other analysis agency, expects gross sales to achieve 1.5 million this yr. However Normal Motors, Ford Motor, Volkswagen and different producers had been anticipating a fair sooner ramp-up.

However customers have balked on the excessive costs of lots of the latest electrical fashions. Many drivers are additionally reluctant to make the change to battery energy, as a result of they aren’t positive they are going to have the ability to discover sufficient locations to rapidly refuel. That has pressured automakers to reset their plans.

G.M. had as soon as forecast it will produce 400,000 electrical autos by the center of 2024 however now has given up that focus on, and it has delayed the manufacturing of some electrical fashions.

Ford had been aiming to have sufficient manufacturing facility capability by the tip of 2024 to make 600,000 battery-powered autos a yr, however it just lately lowered manufacturing plans for its electrical F-150 Lightning and its electrical sport-utility car, the Mustang Mach-E.

On Wednesday, G.M. mentioned that its gross sales of recent autos in america jumped 14 % final yr. The corporate offered 2.6 million automobiles and light-weight vehicles in 2023, up from 2.3 million in 2022, when the chip scarcity restricted manufacturing.

G.M. offered about 76,000 electrical autos, up from 39,000 in 2022. However most had been Chevrolet Bolts, a mannequin that the corporate just lately stopped making. Solely about 13,000 had been car primarily based on newer battery know-how that G.M. had been hoping would make its electrical autos reasonably priced to many extra automotive patrons.

Gross sales for G.M. within the fourth quarter had been comparatively weak. They climbed simply 0.3 % from the identical interval a yr earlier and had been down 7 % in contrast with the third quarter of 2023. The corporate mentioned the gross sales of a number of necessary fashions had been restricted by a strike at a few of its crops by the United Vehicle Staff union.

Individually, Toyota Motor, the second largest vendor of automobiles in america after G.M., mentioned its 2023 gross sales rose 7 %, to 2.2 million autos. The corporate’s gross sales within the fourth quarter had been 15.4 % larger than in the identical quarter a yr in the past and about 5 % larger than within the third quarter.

Stellantis, the maker of Chrysler, Ram and Jeep autos, mentioned that it offered 1.5 million automobiles and vehicles in 2023, about 1 % lower than the yr earlier than. The corporate plans to introduce eight new electrical autos this yr, and it goals to have battery-powered fashions account for half of its North American gross sales by the tip of the last decade.

Honda, Hyundai and Kia additionally on Wednesday reported robust U.S. gross sales for 2023 And on Tuesday, Tesla, which dominates the electrical automotive enterprise in america, mentioned it offered 1.8 million automobiles worldwide final yr, up 38 % from 2022.

Ford is anticipated to report its gross sales complete on Thursday.