Slim Inventory and High Prices to Cause Dip in January Vehicle Sales
Consultants J.D. Power and LMC Automotive predict retail sales of new vehicles could fall 8.3% to 828,900 units in January 2022, compared to January 2021.
“The volume of new vehicles being delivered to dealerships in January has been insufficient to meet strong consumer demand, resulting in a significantly diminished sales pace,” said Thomas King, president of the data and analytics division at J.D. Powers in the report.
Bottlenecks arise in supply chains as COVID-19 restrictions limit access to labor and raw materials. The winter surge of COVID-19 infections increased worker shortages at factories, even as demand stayed strong.
Skyrocketing new vehicle transaction prices are also to blame. The average new-vehicle retail transaction price will reach $44,905 in January, slightly lower than the $45,283 average transaction price in December 2021.
Analysts forecast total new-vehicle sales for January 2022, including retail and non-retail transactions, will reach 932,099 units, a 15.6% decrease from last year. They say the seasonally adjusted annualized rate for total new-vehicle sales will hit 14.1 million units, down 2.6 million units from 2021.
Cox Automotive reported it expected new-vehicle sales in January to reach 1.01 million units, a drop of 8.9% compared to January 2021. The analysts also expects seasonally adjusted annual rate to finish near 15.3 million, up from 12.4 million in December, the slowest pace since May 2020.
It’s not all doom and gloom however. Both J.D. Power and LMC Automotive expect 2022 global light vehicle sales to grow by 6% to 86.2 million units.