Last year, the U.S. auto sales industry was plagued by shortages of computer chips and other components, which caused vehicle sales to decline by 8% from 2021 to their lowest level in more than a decade.
Although slowly, vehicle supplies on dealer lots are expanding, which is excellent news for consumers. Automakers also anticipate at least a slight decrease in pricing this year as inventories grow.
Due to a component bottleneck and high demand for new vehicles, automakers revealed on Wednesday that they sold 13.9 million cars, trucks, SUVs, and vans in 2017. Since 2011, when the economy was still bouncing back from the Great Recession, this was the lowest sales figure recorded.
But because part availability improved enough to allow for a small rise in production, sales were slightly up in the fourth quarter and stocks increased. As long as demand continues high, analysts now anticipate sales to increase by around 1 million to 14.8 million this year. However, they will still fall well short of the 17 million that were born annually before the pandemic.
The average cost of a new car increased 2.5% in December to a record high of just over $46,000, yet several models are still in short supply.
However, there are indications that prices may be beginning to moderate a little as supplies rise.
The average new vehicle price did increase 2.5% in December to a record high of just over $46,000, according to J.D. Power, despite the fact that many models are still in limited supply.
There are indications, though, that as inventories increase, prices may be beginning to moderate a bit.
People who wanted new cars throughout the majority of last year had to pay sticker price or more and settle for whatever makes and models the dealers could get. Dealers, however, have informed Christ that things have slightly shifted in the last two to three months for less well-liked models. He added that because of budget cuts brought on by inflation and rising borrowing rates, more consumers are also interested in cheaper cars.
Hey, can I get a discount here, they’re saying as they enter. Jesus said. “I do believe that there has been a little more of a buyer’s market where the client may negotiate on some vehicles, not just in our brand, but across the industry.”
It remains to be seen if that endures for the entire year. Dealers will receive that, according to Christ, if demand remains high and consumers are prepared to pay the sticker price. However, discounts could increase and prices could slightly decline if demand declines or supplies rise sharply.
According to Jessica Caldwell, executive director of analytics at Edmunds.com, the industry is expected to experience slight price reductions on some models as a result of Toyota’s experience.
There isn’t as much extra money to invest in a car, she claimed. “Prices have been high before, but prices with (higher) interest rates have never really been higher.”
But because people want to buy them now, she continued, electric cars and other popular items will continue to be pricey.
Caldwell doubts whether we’ll ever reach 2019 levels and doesn’t anticipate vehicle supplies or prices reverting to pre-pandemic levels this year.
The COVID-19 epidemic led automakers to close plants in the spring of 2020, which is when the computer chip shortage began. When people were cooped up at home, chip companies switched production to consumer devices to fuel a boom in computer and gaming sales. Chip manufacturers weren’t producing as many semiconductors for cars, which need to be built to endure vibration and harsh temperature changes when the auto plants restarted earlier than anticipated.
Even while US auto chip manufacturing has increased, it hasn’t yet reached pre-pandemic levels, thus US auto plants haven’t yet resumed operating at full capacity.
As a result, according to Motorintelligence.com, the automakers sold 13.9 million fewer vehicles in 2017 than they expect to sell in 2021.
With full-year sales up 2.5%, General Motors reclaimed the top rank in terms of sales in the country. Toyota, which claimed the title in 2021, suffered a 9.6% decline in sales in 2017. On Thursday, Ford releases sales data.
Stellantis, previously Fiat Chrysler, saw a 13% decline in sales, while Honda saw a 32.9% decline. Hyundai outsold Nissan, whose sales fell by 25.4%, with a gain of slightly under 1%. Subaru sales decreased by 4.7%, while Kia sales were down 1.1% for the year.