Mar. 27—ANDERSON — Although new vehicle sales are expected to enjoy a healthy increase in 2023, local auto dealers remain wary of higher interest rates which could keep would-be buyers out of showrooms even as supply gradually improves.

"Higher interest rates will impact budget conscious buyers," said Mark Harrison, president and owner of the Ed Martin Automotive Group. "That will most likely push them into cheaper models, into a used vehicle, or out of the market altogether."

In early February, Ed Martin announced that it had acquired Ford Autoworld and Myers Autoworld Buick GMC, further strengthening its presence along the Scatterfield Road corridor and giving the company a total of five dealerships within three miles of Interstate 69.

"We've been in the city a long time. We know the (automotive) heritage of it," Harrison said. "We just grew to a place where we thought we would be the natural successor for the Autoworld dealerships."

Although adding the Ford, Buick and GMC brands to its portfolio in theory positions Ed Martin to capitalize on expected demand increases for those vehicles, Harrison cautioned that post-pandemic supply chain problems, which persisted well into 2022, have yet to be fully resolved.

"Some brands have been able to produce a few more (vehicles), but nowhere near pre-pandemic levels," he said. "We're not expecting any real (sales) gains in the near term."

Cox Automotive, a leading software company that tracks new and used car sales trends, expects new vehicle sales in the U.S. to approach 14.1 million in 2023, a forecast its senior economist Charlie Chesbrough calls "tepidly optimistic," given current low inventories and prices approaching record highs.

Uncertainty in the new vehicle market inevitably translates into unpredictability for used car buyers, according to Steve Hembree, owner of Hembree Motors in Elwood. He said sales at his dealership remained strong to close out 2022, but rising interest rates continue to give pause to those in the market.

"Rates haven't gone up as much as home mortgage rates, and there's still demand out there," Hembree said. "The thing with us on the used end is, we need those new car sales because down the line, they generate trade-ins, which is where you can find a lot of good used inventory. There's still a tight supply on the used end for sure."

Demand for electric vehicles and hybrids may be surging in some quarters, both Harrison and Hembree agreed, but factors other than supply chain issues are crimping production, which means local demand for them is likely to remain lukewarm.

"There's more than just supply issues with EVs," Harrison said. "Range anxiety and (questions about) charging stations will also hamper sales."

Hembree said the charging station question is especially pertinent in more rural areas.

"The jury's still out (on electric vehicles), I think," he said. "There just isn't enough information out there about infrastructure for them. Where are you going to charge an EV in Elwood, or Tipton, or Alexandria? It's just way too early to say there's going to be a lot of demand for them in the near future."

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