According to Automotive News, U.S. auto sales fell 17% last month. Sales also fell by double digits among the auto brands Toyota, Ford, Honda, Hyundai, and Kia.
Analysts attribute the downturn to the ongoing chip shortage as well as other supply chain problems, which have led to low new vehicle inventories at dealerships. In fact, Automotive News goes on to say that J.D. Power reported U.S. dealers had fewer than 900,000 new cars and light trucks available for sale in April, compared to 1.7 million last year.
According to the latest estimate from AutoForecast Solutions, as reported by Forbes, the chip shortage could reduce automotive production in North America by more than 200,000 units this year.
“Since January 2021,” Forbes reports, “The chip shortage has cost North American auto production around 2.3 million cars and trucks, and potentially nearly 3.5 million, if lost production can’t be made up.”
As a result of this low supply, consumers are still seeing record-high prices. According to TrueCar Inc., as reported by Forbes, the estimated average transaction price in April 2022 was $43,755, a rise of 14.7% compared to April 2021. Incentives have also been reduced by 8.5% compared to last year.
Rising interest rates have also played a role in driving up prices with an average interest rate for loans in April of 4.47%, up from 3.95% in January.
Demand for New Vehicles
Despite these factors, the demand for new vehicles appears to remain strong. As the Sierra Sun Times reports, consumers continued to pay well above MSRP for new vehicles, which makes April 2011 the eleventh straight month in a row of an “over sticker market.”
The share of total sales by luxury vehicles rose to 17.4%, up from 16.7% of total sales over the previous month, which also contributed to higher overall average transaction prices for new vehicles, helping push overall average transaction prices up to $46,526. “Prices rose 0.7% ($304) month over month and remain elevated compared to one year ago, up 13.0% ($5,354) from April 2021,” reports Kelley Blue Book.
Check Back for More 2022 Updates
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