U.S. auto sales to fall in July on slim inventories – J.D. Power
2022.07.27 16:18
FILE PHOTO: Automobiles are shown for sale at a car dealership in Carlsbad, California, U.S. May 2, 2016. REUTERS/Mike Blake/File Photo
(Reuters) – A shortage of vehicles at dealers due to the supply chain snarls gripping automakers is expected to drive down U.S. auto retail sales in July, said consultants J.D. Power and LMC Automotive.
Total new-vehicle sales including retail and non-retail transactions this month are expected to decline 5.7% from a year earlier after adjusting for total selling days, the consultants said in a report on Wednesday.
Automakers have struggled with supply-chain disruptions caused by the COVID-19 pandemic including those resulting from recent lockdowns in China, with Russia’s invasion of Ukraine exacerbating the problem.
The industry also has to compete for limited semiconductor supplies with other manufacturers such as consumer electronics device makers.
“In August, the overall industry sales pace will continue to be constrained by procurement, production and distribution challenges,” said Thomas King, president of data and analytics division at J.D. Power.
But the supply shortfall, coupled with strong demand, has translated to record transaction prices and dealer profitability, according to the consultants.
New vehicle prices in the United States likely stayed near record levels in July, with average transaction price expected to rise 12.3% to $45,869, they said.
The seasonally adjusted annualized rate for total new-vehicle sales in the country is expected to be 13.7 million units, down 0.9 million units from last year.
The consultants also expect 2022 global auto sales volume to decline 0.8% from a year earlier to 80.8 million units.
“While there is near-term upside potential in China, we believe volume will cool as inventory becomes tight, given strength of demand,” they said.
