U.S. to record slow auto sales in December amidst supply constraints

U.S. to record slow auto sales in December amidst supply constraints

by Pranali Mehta

According to a report given by consultants, J.D. Power and LMC Automotive, auto retail sales in the U.S. are likely to go down in December this year, owing to the rising prices caused by supply shortages and rapidly increasing consumer demand.

The report mentioned that retail sales of new vehicles could likely drop by 17.7% to 2,923,600 units from the previous year.

President of data & analytics at J.D. Powers, Thomas King, mentioned that the strong demand with limited supply is leading to a continuous rise in prices.

Following a continuous increase in the prices of raw materials, all auto manufacturers are it small or big are facing the strongest inflationary pressure in three decades.

Average transaction prices are predicted to hit USD 45,743, crossing the USD 45,000 mark for the first time, and 20% higher than that in December 2020, when prices first crossed the USD 38,000 mark.

After increasing by 10.1% in October, the production at auto plants increased by 2.2% last month. However, due to the global semiconductor shortage, motor vehicle production was 5.4% lower than the same period the previous year.

In December 2021, total sales of new vehicles including retail and non-retail transactions, are expected to reach 1,245,600 units, which is 20.5% lower than the previous year’s levels.

The president of operations and global vehicle forecasts at LMC Automotive, Jeff Schuster, mentioned that a slight improvement in the chip shortage might be overshadowed by risk from the rising cases of the COVID-19 Omicron variant.

Notably, the total seasonally adjusted new-vehicle retail sales are anticipated to reach 13 million units, which is 3.5 million units less than that of 2020.

Despite the increased risk, analysts predict that global light vehicle sales could reach 86 million units in 2022, compared to 750,000 units more from last month.

Source Credits:

https://money.usnews.com/investing/news/articles/2021-12-23/u-s-auto-sales-to-fall-in-december-due-to-supply-constraints-data

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...