Toyota Executive Expects Average New-Car Prices to Exceed $50K in 2023

In February, average new-car prices reached a new peak, jumping by 4.8 percent from a year ago to $46,229, according to J.D. Power. The consistent increases over the past few years may seem untenable—like the bubble will have to burst soon—but a Toyota executive thinks the average is only going to continue rising. Jack Hollis, head of sales for Toyota’s North American division, said he believes the average transaction price will crest the $50,000 mark in 2023.

Although Hollis believes that an economic recession is already underway, it does not match the usual expectations for how the market in recession should behave, with demand for new cars remaining extremely high. “We will sell every vehicle that we can make,” Hollis explained. “The only thing holding us back is the totality of the supply chain and the fragility of it, because we’re not back to normal anywhere globally.”

Hollis thinks that the U.S. car market could account for nearly 17 million sales in 2023, if it weren’t for supply issues. The 15 million predicted sales for this year leaves “another 2 million vehicles added to pent-up demand.” This will result in continued strong demand in the used-car market, lessening depreciation and keeping residual values high.