Auto Sales Fall Again In March; Chips Are Down, Prices Are Up

U.S. auto sales are expected to fall more than 25% in March vs. March 2021, due to the shortage of new cars and trucks for sale, forecasters for J.D. Power and LMC Automotive said.

That also implies a decline of about 18% in auto sales for the first quarter, vs. the first quarter of 2021, according to a joint auto sales forecast from J.D. Power and LMC that was published March 23.

The upshot for consumers is continued record-high prices, record-low incentives, and waiting lists for the most sought-after makes and models.

Consumer responses include:

From January 2021 through mid-March 2022, the global semiconductor shortage has reduced North American auto production by around 2.3 million cars and trucks, with a potential impact of more than 3.5 million, if announced production cuts can’t be made up, according to AutoForecast Solutions.

The auto industry has become much more dependent on computer chips for advanced electronic systems, as automakers introduce Advanced Driver Assistance Systems, and hybrid and electric vehicles, said Joseph McCabe, president of AutoForecast Solutions, Chester Springs, Pa.

That has put the auto industry in competition with the consumer electronics industry for scarce computer chips, and made auto plants vulnerable to supply-chain disruptions, he said.

As a result of the computer chip shortage, U.S. auto dealers had only about 900,000 units in inventory for March, far fewer than needed, according to Thomas King, president of the Data and Analytics Division at J.D. Power. In March 2021, U.S. retail auto sales were around 1.4 million.

In the latest forecast, J.D. Power and LMC said March auto sales would be about 1.2 million, down 26.2% vs. March 2021. For the first quarter, they predicted U.S. auto sales of about 3.2 million, down 18.4% vs. a year ago.