New Jeeps are displayed at a automotive dealership on October 05, 2021 in New York Metropolis.
Spencer Platt | Getty Photographs
Automakers will doubtless report sharp gross sales declines for March and the primary quarter, trade analysts say, as an ongoing scarcity of recent automobiles has left car-shoppers with few – and infrequently costly – selections.
U.S. auto gross sales forecasts from Cox Automotive, Edmunds, and J.D. Power/LMC Automotive say that first-quarter gross sales of automobiles, pickup vehicles and SUVs have been doubtless under 3.3 million, down greater than 14% from the first quarter of 2021.
For some automakers, the declines could also be even worse. Edmunds expects General Motors, Honda, Nissan, and Volkswagen to report year-over-year gross sales declines of greater than 20% for the primary quarter, with Ford faring solely barely higher.
However whereas gross sales are falling, costs are rising: TrueCar analysts said that the common promoting value of a brand new car within the U.S. doubtless rose 15.4% in March from a yr in the past, to almost $43,500.
Shopper considerations about inflation – together with larger gasoline and car costs – doubtless performed a task within the quarter’s projected gross sales decline, which incorporates an anticipated drop of not less than 24% in March. However the largest issue is the skinny provide of recent automobiles amid a global shortage of semiconductor chips.
“Skyrocketing gasoline costs have been high of thoughts for customers in March, however the lack of stock is what in the end depressed new car gross sales within the first quarter,” mentioned Jessica Caldwell, Edmunds’ govt director of insights.
Edmunds’ forecast requires a 15.2% year-over-year decline in first-quarter auto gross sales. The corporate reported that inventories stay very skinny, with simply 20 days’ provide of gas-powered automobiles and 21 days’ value of electrical automobiles obtainable. 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 famous, they might now be going through further provide challenges within the wake of Russia’s invasion of Ukraine.
U.S. auto gross sales have historically ramped up in March as spring climate arrives in a lot of the U.S., famous Cox Automotive’s senior economist, Charlie Chesborough. He thinks that shopper demand would most likely be sturdy proper now – if solely automakers had extra automobiles to promote.
“Low unemployment, comparatively low rates of interest — the circumstances are proper for larger gross sales,” Chesborough mentioned. However, he mentioned, till automakers are capable of enhance the variety of automobiles on sellers’ heaps, gross sales will stay weak.
“Make no mistake,” he mentioned, “this market is caught in low gear.”