Prices of vehicles in the United States have gone through the roof because of shortages in the supply of vehicles compounded by continued high demand which is consequently expected to cause a drop in retail auto sales in the country in December, according to a report published by consultant firms J.D. Power and LMC Automotive released recently.
According to the report, it is expected that there would be a 17.7 per cent drop in the retail sales of new vehicles to 2,923,600 units in December compared to the same month a year ago.
"Intense demand with this limited supply is resulting in prices continuing to increase," said Thomas King, president of the data and analytics division at J.D. Powers.
All companies attached to the auto industry are struggling to cope up with inflationary pressure which is the strongest in three decades which is a result of the continued rise in prices of raw materials.
According to the report, the average transaction prices are anticipated to touch $45,743, which will be over the $45,000 mark for the first time, and is expected to be 20 per cent higher compared to the price in December 2020 when the average transaction prices moved over the $38,000 mark.
Last month, there was a 2.2 per cent increase in production at auto plants in the country after growing by 10.1 per cent in the month of October. However, the rollout of motor vehicles in November from the plants was still 5.4 per cent lower than the same month the year before because of a continued global shortage in semiconductors.
The report noted that the projected total sales of new vehicles in December 2021, which includes retail and non-retail sales, will reach 1,245,600 units, which would be 20.5 per cent lower from the same month last year.
"A mild improvement in the chip shortage may be overshadowed by risk from the surge in Omicron variant COVID-19 cases", said Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive.
In December, the average retail transaction price for new vehicles is expected to reach $45,743 compared to $44,515 in November which was also a record high.
The seasonally adjusted annualized rate for total new-vehicle sales is expected to be 13 million units, lower than the 3.5 million units sold for the same month in 2020.
Despite the increased risk, analysts predict that global light vehicle sales would climb to 86 million units in 2022, up 750,000 units from last month.
(Source:www.usnews.com)
According to the report, it is expected that there would be a 17.7 per cent drop in the retail sales of new vehicles to 2,923,600 units in December compared to the same month a year ago.
"Intense demand with this limited supply is resulting in prices continuing to increase," said Thomas King, president of the data and analytics division at J.D. Powers.
All companies attached to the auto industry are struggling to cope up with inflationary pressure which is the strongest in three decades which is a result of the continued rise in prices of raw materials.
According to the report, the average transaction prices are anticipated to touch $45,743, which will be over the $45,000 mark for the first time, and is expected to be 20 per cent higher compared to the price in December 2020 when the average transaction prices moved over the $38,000 mark.
Last month, there was a 2.2 per cent increase in production at auto plants in the country after growing by 10.1 per cent in the month of October. However, the rollout of motor vehicles in November from the plants was still 5.4 per cent lower than the same month the year before because of a continued global shortage in semiconductors.
The report noted that the projected total sales of new vehicles in December 2021, which includes retail and non-retail sales, will reach 1,245,600 units, which would be 20.5 per cent lower from the same month last year.
"A mild improvement in the chip shortage may be overshadowed by risk from the surge in Omicron variant COVID-19 cases", said Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive.
In December, the average retail transaction price for new vehicles is expected to reach $45,743 compared to $44,515 in November which was also a record high.
The seasonally adjusted annualized rate for total new-vehicle sales is expected to be 13 million units, lower than the 3.5 million units sold for the same month in 2020.
Despite the increased risk, analysts predict that global light vehicle sales would climb to 86 million units in 2022, up 750,000 units from last month.
(Source:www.usnews.com)
