Mainly due to the low availability of new cars and trucks, US auto sales in July are expected to fall about 6% from the same month a year ago.
With little reason to hope for a significant improvement in the supply of new vehicles this year, industry experts are already talking about next year or even the year after, before inventories catch up enough to demand. to bring new vehicle prices back to earth.
“We’re selling everything we’ve got,” David Hult, president and CEO of Asbury Automotive Group, Duluth, Georgia, said on a conference call this week to announce second-quarter results.
According to a joint forecast by JD Power and LMC Automotive, July will be the ninth consecutive month that new vehicle retail inventories will fall below a total of 900,000 cars and trucks. Forecasts call for July auto sales of about 1.2 million units, down 5.7% from a year ago. This includes sales for daily rentals, corporate and government fleets.
Cox Automotive has a similar but slightly lower forecast for July auto sales, which rounds out to 1.1 million. Atlanta-based Cox Automotive cites “recovery headwinds” such as rising interest rates, rising gasoline prices and falling consumer sentiment in its forecast.
While these are obvious potential threats, forecasters at Cox and JD Power-LMC agree that tight supply is the No. 1 problem depressing auto sales, and that ‘there is no short-term relief in sight.
Analysts attribute the shortage of new vehicles to a shortage of computer chips, but the continuing COVID-19 pandemic is a contributing cause to the shortage of chips, as well as other bottlenecks in the supply chain. ‘supply.
How much is 900,000 units anyway? To put the inventory shortage into context: New vehicle inventory before the pandemic averaged about 3.5 million in 2019, according to Cox Automotive.
“We continue to experience strong demand across all of our revenue streams, but we do not expect a significant recovery in new inventory levels in 2022,” Asbury’s Hult said on the conference call.