U.S. new vehicle prices are expected to hit a record high in August on the back of strong demand despite rising interest rates. Average transaction prices are set to reach a record $46,259, an 11.5% increase from a year earlier, according to the report from auto industry consultants J.D. Power and LMC Automotive.
New auto brands and models are bursting onto the EV
market after years of dominance by Tesla, Chevrolet and
Nissan, among the small number of early adopters.
More than 3 million vehicles have been axed from automakers’ production schedules worldwide so far this year because of the microchip shortage — but that might be an undercount.
Jack Hollis, head of sales for Toyota Motor North America, says dealership inventory levels won’t be able to grow at all until perhaps the third quarter of 2023, and are unlikely to ever return to their pre-pandemic levels.
For new vehicles, the average auto loan is for 70.4 months (nearly six years) and monthly payments have climbed past $700 for the first time ever, according to new data from Edmunds.
U.S. inventory vehicle levels ticked down in July to 1.02 million, despite a slowing sales rate, as automakers continue to struggle with production and supply issues.
The average new car in America sold for $48,182 in July,
beating the record set last month, according to Kelley Blue
Book data. July prices rose 0.3% ($139) from June and
11.9% ($5,126) from July 2021.
CEO Lachlan Murdoch said today: “We’re currently seeing a return to growth in the auto category for the first time in a couple of years. This stability of the base market provides a strong foundation for the upcoming political cycle, where the outlook is remarkably strong.”
Plug-in hybrid sales are climbing in the U.S., in part because of the recent surge in gasoline prices. Automakers sold a record 176,000 such cars last year, according to Wards Intelligence, up from 69,000 in 2020.
Automakers spent an estimated 41% less on national TV in July 2022 compared to a year ago, and impressions for the month were also down 4.2%, per iSpot.tv.
The dog days of summer drag on for the auto industry, unable to find respite from a withering supply chain crisis that has left assembly lines limping and dealership lots bare, Automotive News reports.
California — no surprise — leads the U.S. in electric vehicle ownership, accounting for 39% of all EVs registered nationwide, according to Axios.
Volume skids 21% at Toyota and 47% at Honda; Korean automakers see U.S. light-vehicle sales drop 11% last month, mostly on weaker car volume; Mazda down 29%.
Huge new investments are being directed to boost semiconductor production worldwide. But that’s just the start of the effort to correct the auto industry’s microchip shortage.
A shortage of vehicles at dealers due to the supply-chain
snarls gripping automakers is expected to drive down U.S.
auto retail sales in July, according to industry watchers.
Supply chain challenges and other economic headwinds are weighing on the auto industry. GM appears to be bucking the trend.
Automakers including Ford Motor, General Motors, Stellantis and Toyota Motor will have a major presence at the auto show in Detroit this September.
Even if there is consumer pushback from rising prices in second-half 2022, and barring a broadbased recession – one with major cutbacks in spending accompanied by job losses – expect production to continue favoring higher-priced cars, CUVs and SUVs, as well as fullsize trucks, and for the combined mix of total inventory for those vehicles to remain above historical norms.
June marked the sixth consecutive month when auto industry levels were between 1 million and 1.1 million vehicles, according to Cox Automotive.
Kimberley Gardiner, one of Volkswagen of America’s top U.S. marketing executives, is leaving the company.