Auto Inventory A Bit Better; Still Short Of Demand

The limited supply of new cars and trucks continues to limit U.S. auto sales, but sales are expected to be up about 9% for the month of September vs. September 2021, according to the latest forecast from S&P Global Mobility.

The forecast expects September auto sales of about 1.1 million in September, vs. around 1.o million in September 2021. S&P Global Mobility said new-vehicle inventory is still low by historical standards, but inventory of about 1.2 million in September was the highest since July 2021.

Year to date, S&P Global Mobility expects U.S. auto sales of about 10.1 million through September, down around 1.6 million units, a drop of almost 14%, vs. the first three quarters of 2021.

For all of 2022, S&P Global Mobility predicts U.S. auto sales of 14 million, down about 6% vs. 2021.

Last year, U.S. auto sales got off to a good start in the first quarter, before a shortage of computer chips and other supply-chain problems took hold, combined with high consumer demand. Since last spring, the U.S. auto industry has been unable to produce enough cars and trucks to meet demand.

High prices are the predictable result. According to Kelly Blue Book, the average, new- vehicle transaction price increased for the fifth month in a row in August 2022, to a record $48,301, an increase of $4,712, or almost 11%, vs. a year ago.

For new vehicles from non-luxury brands, the August average was a record $44,559, with non-luxury buyers paying an average of $1,102 above sticker price. For luxury-brand buyers, the average was $65,935.

The S&P Global Mobility forecast says, “Consumers’ willingness to pay for available vehicles at these prices is evidence that pent-up demand remains in the market.”

Joe Langley, associate director, U.S. production analysis for S&P Global Mobility, says new-vehicle inventory is expected to remain below average, “well into 2023.”

Last week, AutoForecast Solutions estimated that since January 2021, the chip shortage has cost North American auto assembly plants almost 2.9 million cars and trucks that couldn’t be produced, and potentially as many as 4.5 million if lost production can’t be made up.