New vehicle sales in the United States are expected to fall in April as low inventories and rising interest rates drive up prices amid strong demand, consultants JD Power and LMC Automotive said.
Retail sales of new vehicles in the United States could fall 23.8% to 1.1 million units in April from a year earlier, according to a report released Wednesday by the consultants.
Demand remains strong, but with fewer than 900,000 units in stock at dealerships, sales volumes will be well below levels of a year ago, said Thomas King, president of the data and business division. analysis at JD Powers.
The automotive sector has been hit hard by supply issues, with production hampered for more than a year by a global shortage of electronic components and supply bottlenecks due to COVID-19 lockdowns in China and to the war in Ukraine.
The average transaction price is expected to reach an April high of $45,232, an 18.7% increase from a year ago and the second highest level since December last year.
Rising interest rates also pose a threat to current transaction prices, with the average loan interest rate in April expected to rise 33 basis points from a year ago to 4.61%, the consultants said.
The seasonally adjusted annual rate of total new vehicle sales is expected to be 14.5 million units in April, compared to 3.9 million units last year.
The consultants said the global light vehicle sales forecast has now fallen to 81.7 million units in 2022, down 900,000 units from last month.
Total new vehicle sales for April 2022, including retail and non-retail transactions, are expected to reach 1.2 million units, down 21.5% from a year ago.
(Reporting by Kannaki Deka in Bengaluru; Editing by Amy Caren Daniel)