2022 U.S. Auto Sales Expected to End on High Note
“Supply remains well below the level at which consumer demand for new vehicles can be met,” says Thomas King of J.D. Power.
U.S. auto sales this year are expected to end strong but not robust enough to compensate for earlier off-months in 2022.
Total U.S. new-vehicle sales for December will reach 1,254,700 units, a 5.3% increase from the same time last year, according to a joint forecast from J.D. Power and LMC Automotive.
They predict new-vehicle total sales for 2022 to reach 13,687,000 units, an 8.4% decrease from 2021.
Such numbers would be considered calamitous in normal times; not long ago, the auto industry enjoyed annual sales of 17 million or more for five straight years.
But parts shortages – particularly microchips – have forced automakers to cut production, despite the irony of strong consumer demand.
Production levels are slowly increasing, but they have a way to go.
“While the inventory situation has improved modestly in the fourth quarter, supply remains well below the level at which consumer demand for new vehicles can be met,” says Thomas King, (pictured, below left) J.D. Power’s data and analytics division president.
Thomas King JDPower CROPPED
Transaction prices are expected to hit a record high for December, even with shoppers becoming more sensitive to dealer markups over MSRP.Those high transactional costs may send some shoppers into something greater than sticker shock. Meanwhile, today’s premium prices have led to record dealer profits.
“New-vehicle transaction prices continue to rise, albeit at a slower pace than earlier this year,” King says.
The average price in December is expected to set a record of $46,382, an increase of 2.5% from a year ago.
Buyers are on track to spend nearly $48.2 billion on new vehicles in December, the third-highest level ever for the month, which typically sees brisk vehicle sales.
Total retailer profit per unit – including grosses and finance and insurance income – is on pace to be $4,144.
That is down 19.8% from a year ago, but still more than double 2019 levels. The decline is due primarily to dealers selling fewer vehicles above MSRP.
“Dealerships are continuing to pre-sell a good portion of their available inventory allocation, but increased production means vehicles are spending slightly more time at dealerships,” King says.
In December, 47% of vehicles will be sold within 10 days of arriving at a dealership, down from a high of 57% in March, according to J.D. Power data tracking.
The average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 23 days. That’s up from 18 days a year ago.
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