According to J.D Power and LMC Automotive analysts, there will likely be a slump in retail auto sales for July due to massive supply-chain and distribution problems globally. Total sales, including retail and non-retail transactions, may decline as much as 5.7% from a year earlier.
Many supply-chain problems are causing car shortages, including COVID-19 lockdowns in China, where many manufacturing plants reside. China is not the only factor, however. Russia’s invasion of Ukraine is also driving prices high, leading to shortages.
The analysts stated in a report, “While there is near-term upside potential in China, we believe volume will cool as inventory becomes tight, given the strength of demand.”
The SAAR, or the seasonally adjusted annualized rate, for new vehicle sales, is anticipated to be 13.7 million units, a decrease of 0.9 million units from 2021. Although, vehicles are still high in demand and going for record transaction prices. The average new vehicle sale price for July 2022 is $45,869, a 12% increase.
According to Thomas King, President of the Data and Analytics Division at J.D. Power, “In August, the overall industry sales pace will continue to be constrained by procurement, production and distribution challenges. Consumer demand remains markedly higher than supply, all of which points to a continuation of the current marketplace dynamics of depressed sales volumes but record pricing and profitability.”
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