Market Fragmentation Weighs on Growth as Cox Automotive Projects 15.8 Million Vehicle Sales in 2026

Cox Automotive has estimated U.S. sales of new vehicles to 15.8 million in 2026, a decline of 2.4 percent compared to 2025, as a disjointed economic and consumer environment takes its toll on the increase. The outlook, which was published on January 6, 2026, indicates the existence of a slower but stable auto market after a more robust-than-imagined performance in 2025.

Cox Automotive estimates that most of the key sales indicators would only slightly ease next year with a cooling demand and not a steep decline. According to Jeremy Robb who is the interim chief economist of Cox Automotive, there will be a recession in 2026 compared to 2025 but the market will still recover. He showed possible optimism in the first half of the year such as the reduced interest and better tax returns giving some relief on vehicle demand.

Unequal economic forces are one of the key themes that will form the 2026 forecast because the market will be fragmented. Families with higher incomes will be caught in the wealth effects, tax reductions and reduction of rates and promoted the sale of new-vehicle sales. On the other hand, the low-wage earners will still have to contend with affordability challenges caused by longer-term inflation and the high cost of purchasing vehicles. Such disruption is most likely to increase the rate of trade-down behavior, as the perception of value is becoming more crucial among the automakers and dealers.

There are also ambivalent indications in the labor market. Cox Automotive recognises the present situation as a jobless expansion where the GDP is supported by investments and productivity gains, but employment gains are still slow. Sluggish job growth would dim consumer confidence on buying major goods such as cars although gains in the stock markets partially offsets them.

Another presentation of complexity is policy uncertainty. Continued changes in the industrial policy, possible tariff changes, fuel-government alterations and alterations in the tax-code should be met with volatility, as well as a potential re-negotiation of the USMCA. Simultaneously, the electric car market reaches a new stage in 2026, and the level of governmental support becomes less, and the number of off-lease EVs gaining access to the used car market increases.

Artificial intelligence is also represented by Cox Automotive as an inflection point of the industry. Although AI-based productivity would contribute to efficiency in retail, prices will be more open, and customers will have better experiences, the transparency of competition might increase since the first to use AI will obtain advantages before their competitors do.

In general, the 2026 picture predicts an auto market that is cooling, although still fundamentally healthier, which is backed by minor downturns, as opposed to drastic ones.

2026 U.S. Auto Market Forecast Highlights