Auto sales could hit below 2020 levels
By KALEA HALL
The Detroit News
9 hrs ago 0
Low inventory levels led Cox Automotive analysts to again revise their full-year U.S. 2022 new-vehicle sales forecast downward.
At a discussion Tuesday with media, analysts projected 14.4 million
sales this year, below the 14.6 million sold in pandemic year 2020.
Cox initially forecast 16 million sales for the year before dropping
that estimate to 15.3 million, followed by the latest revision.
June sales are expected to finish near 1.2 million, down 7.5% from last year’s 1.3 million sales, Cox forecasts. Tight inventory continues to constrain sales, with supply issues still lowering output while demand
remains steady. As a result, since June 2021, monthly sales have been
averaging 1.1 million units a month.
“It is simply impossible given the latest production forecast to get to
15 million by the end of the year,” Cox Chief Economist Jonathan Smoke
said during the roundtable discussion.
Despite lower sales, automakers are making more per sale in the
low-supply, high-demand market where incentives aren’t needed to achieve sales. Demand is expected to stay put for the most part, but declining
consumer confidence and the Federal Reserve’s move to increase the
benchmark interest rate to curb inflation could dissuade some people
from buying in 2022.
“There’s still a greater demand than what we have available,” Cox Senior Economist Charlie Chesbrough said.
“We still see this market as constrained. Clearly, the higher interest
rates and the changing economy ... probably moves some folks out of the
line that wanted to get a vehicle,” he said. “But, again, it’s still
just we don’t have enough product for the people who do want to ... buy
this year.”
Moving forward, it’s unclear how quickly automakers will want to rebuild inventories to get back to “normal” levels since they are doing well in this environment.
“We’re seeing more and more evidence that this tight-supply market,
these high prices, these strong margins that the OEMs are getting and
strong dealer sentiment from all of this that they are still making good
money suggests that the industry really isn’t in a massive hurry to get things back to the way they were,” he said.
Chesbrough did say “sales aren’t high enough now to keep revenues at a stable level, so they are suffering a little bit more than they were
last year.”
https://www.nny360.com/artsandlife/autofeatures/auto-sales-could-hit-below-2020-levels/article_442981e5-7112-53c1-b178-fc8adefd2809.html
Holy shit. They're only selling 1.1 million new cars every month.
How will we ever survive!?
TB
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