US car sales are declining at an uptrend due to tight inventories in April: data

According to consultants JD Power and LMC Automotive, new car sales in the United States are expected to decline in April as lower inventories and rising interest rates push prices up amid rising demand.

According to a report released by a consultant on Wednesday, new car sales in the United States in April could be 1.1 million units, down 23.8% year-on-year.

Thomas King, president of JD Powers’ data and analytics division, said demand remained strong, but sales were well below previous year’s levels as retailers had less than 900,000 inventories. I am.

The automotive sector has been hit hard by supply problems, and the blockade of COVID-19 in China and the war in Ukraine have hampered production for over a year by global shortages of electronic components and supply bottlenecks. ..

Research firm Cox Automotive also predicts that April sales will decline 1.7% from March due to tight inventories, adding that the situation is unlikely to improve in 2022.

Charlie Chesbro, senior economist at Cox Automotive, said in a statement, “We expect production to improve in the second half of the year, but fulfilling existing orders does not significantly build up dealer inventory. There is a possibility. “

Rising interest rates also pose a threat to current transaction prices, according to consultants, with average interest rates on loans in April expected to rise 33 basis points from a year ago to 4.61 percent.

They also added that global forecasts for light vehicle sales fell to 81.7 million units in 2022, down 900,000 units from last month.

Total new car sales, including retail and non-retail transactions, are projected to reach 1.2 million units in April 2022, down 21.5% from last year.

By Kannaki Deka