Steel Summit: Cox sees US auto demand ‘steady as she goes’

Vehicle affordability pressures are limiting growth in vehicle volumes, according to Mark Strand, deputy chief economist at Cox Automotive. SUVs, fleet activity, and aftermarket work could support steel demand, he told the audience last week at Steel Summit 2026 in Atlanta.

Affordability constrains vehicle demand

Strand’s Wednesday morning presentation highlighted that US light-vehicle demand is likely to remain near the 16-million-unit seasonally adjusted annual rate. He described the outlook as “steady as she goes, demand-wise.” Until something changes with buyer incomes, interest rates, and vehicle affordability, “we’re kind of range-bound” when it comes to auto production, he said.

Affordability remains a major constraint. Average new-vehicle payments are about $800 per month, with Strand suggesting a more affordable payment is closer to $600. Higher financing costs, flat buyer incomes, and rising ownership expenses are limiting demand. Additionally, he noted, new-vehicle demand is concentrated among higher-income and older households.

Higher household costs are also affecting demand. Housing, healthcare, and education costs have increased pressure on household budgets, he explained. Maintenance, repair, and insurance costs have also risen. Consumers are also keeping vehicles longer, and some are shifting to used vehicles.

Financing costs remain elevated. He noted that longer-term new-vehicle loans are more common, and longer-term Treasury yields and auto-loan rates have also risen. The economist does not expect meaningful near-term rate relief.

Automaker incentives are offering limited support. Incentives now equal approximately 6.5% of average transaction prices. Before the pandemic, they were roughly 11-13%.

SUVs, fleets, and older vehicles support steel demand

Strand stressed the flat production outlook does not eliminate support for steel demand. More steel-intensive SUVs represent a growing share of the vehicle mix. Fleet activity is also increasing. SUVs are generally larger and can require more material per vehicle, although steel content varies by model and material mix.

In addition, older vehicles may support aftermarket demand. Consumers are maintaining those vehicles for longer. That could increase demand for replacement parts, Strand said.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held various editorial positions with steel industry publications, associations, and mills since 2007. She joined the SMU team in 2022. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania.