Citing continuing low-vehicle inventory, a couple of prominent forecasters cut their 2022 U.S. light-vehicle sales forecasts to 15.3 million from the 16-million range.
Automakers may not be in any hurry to rebuild inventory, since factories and dealers are making so much more money at lower volume, says Charlie Chesbrough, senior economist and senior director-industry insights, for Cox Automotive.
“This is a seller’s market,” Chesbrough (pictured, below left) says at a webinar hosted by the American International Automobile Dealers Assn. He’s scaled back his 2022 U.S. light-vehicle forecast to 15.3 million, from 16 million.
That would be the lowest total since 2013 at about 15.6 million, when industry sales were still climbing back from the Great Recession.
Separately, LMC Automotive cuts its new-vehicle forecast for 2022 to 15.3 million, down from 15.8 million a month earlier. “The recovery pace is now expected to be slower than it was at the beginning of the year,” LMC Automotive says in a statement.
Meanwhile, the National Automobile Dealers Assn. has a 2022 U.S. light-vehicle sales forecast of 15.4 million. Patrick Manzi, NADA chief economist, says in a blog post he’s sticking with that number, but he acknowledges there is downside risk from “ongoing supply-chain issues, global conflicts and pandemic-related impacts.”
Cox Automotive’s Chesbrough says U.S. new-vehicle inventory is barely 1 million cars and trucks, down 57% vs. year-ago. At the same time, Cox Automotive says average new-vehicle transaction prices recently reached 103% of manufacturer’s suggested retail price.
“That’s one of the reasons we think this industry may not be in a hurry to get back to normal” in terms of inventory and incentives, he says.
“The question is, how desperate are OEMs to get back to a full 60 days’ supply at dealerships? It just doesn’t seem like it’s necessary if they can keep these margins going,” Chesbrough says. “The question we keep asking ourselves is: ‘Why get back to normal? What’s the rush?’”
