New Jeeps are displayed at a automotive dealership on October 05, 2021 in New York Metropolis.
Spencer Platt | Getty Photos
Trade analysts say automakers will report a pointy drop in gross sales in March and the primary quarter, as an ongoing scarcity of latest automobiles has left car-buyers with few — and sometimes expensive — choices.
U.S. auto gross sales forecasts from Cox Automotive, Edmunds, and JD Energy/LMC Automotive say first-quarter gross sales of automobiles, pickup vans, and SUVs had been anticipated to drop by 3.3 million, up greater than 14% from the primary quarter of 2021 Was.
For some automakers, the decline may very well be worse. Edmunds expects Normal Motors, Honda, Nissan and Volkswagen to report year-over-year gross sales declines of greater than 20% for the primary quarter, with barely outperforming Ford.
However whereas gross sales are falling, costs are rising: TrueCar analysts stated the typical promoting worth of a brand new car within the U.S. rose 15.4% in March from a 12 months earlier to just about $43,500.
Shopper considerations about inflation – together with increased fuel and car costs – performed a task within the decline in projected gross sales for the quarter, together with an anticipated drop of at the very least 24% in March. However the largest issue is the brief provide of latest automobiles amid a world scarcity of semiconductor chips.
“Skyre fuel costs topped off for customers in March, however stock crunches finally impacted new car gross sales within the first quarter,” stated Jessica Caldwell, government director of Edmunds.
Edmunds’ forecast requires a 15.2% year-over-year decline in first-quarter auto gross sales. The corporate identified that with solely 20 days’ provide of gas-powered automobiles and 21 days’ price of electrical automobiles obtainable, the stock stays very skinny. Automakers sometimes goal to have sufficient automobiles in stock to final 60 to 70 days.
Not solely are automakers nonetheless grappling with Covid-related supply-chain disruptions, Caldwell stated, they could now face extra provide challenges within the wake of Russia’s invasion of Ukraine.
Charlie Cheesborough, senior economist at Cox Automotive, stated US auto gross sales have historically risen in March as spring approaches a lot of the US. He thinks shopper demand will most likely be stronger now — if solely automakers had extra automobiles to promote.
“Low unemployment, comparatively low rates of interest — the circumstances are proper for increased gross sales,” Cheesborough stated. However, he added, until automakers are capable of improve the variety of automobiles on supplier tons, gross sales will stay weak.
“Make no mistake,” he stated, “this market is caught in low gear.”