According to analysts from J.D. Power-LMC Automotive, vehicle retail sales in the United States are likely to fall for January 2022. This can be attributed to the restricted manufacturing output over Omicron disruptions, global inflation, and supply chain bottlenecks which have led to high automotive prices.
As per the forecasts, retail sales of new vehicles could drop 8.3% to 828,900 units as compared to the previous year. In January alone, the volume of new vehicles supplied to dealerships has been quite insufficient to match strong consumer demand.
This has resulted in a dramatic reduction in sales pace. Even the COVID-19 pandemic has produced supply chain bottlenecks, further raising expenses for labor and raw commodities.
New vehicle prices are continuing to rise as customer demand exceeds supply. The average new-vehicle retail transaction price is predicted to hit USD 44,905 for January, surpassing the previous high of USD 45,283 in December 2021.
In January, economic activity in the United States grew at its weakest rate in more than a year, as the winter COVID-19 infection rate worsened while factory worker shortages continued, regardless of the demand remaining solid. Total new-vehicle sales, including retail and non-retail transactions, are expected to reach 932,099 units, down 15.6% from the previous year.
A slew of factors have been impacting the market for months and have threatened to derail the start of 2022. Geopolitical fears about a potential Russia-Ukraine confrontation are contributing to the economic risk as well, experts claimed.
Equally, new-vehicle sales are forecast to total 14.1 million units, down 2.6 million units from 2021. Despite the increased risk, the experts predict that global light vehicle sales will increase by 6% to 86.2 million units in 2022.
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