December auto sales are disappointing, ending an underperforming year

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Forecasters expect US auto sales in December to fall more than 20% from December 2020, due to the continued shortage of new vehicles, in turn due to a shortage of chips. IT and other supply chain issues.

However, consumer demand remains high. The combination of high demand and low supply will predictably keep prices high and incentives low, likely through most if not all of 2022, analysts say.

Most automakers in the U.S. market report fourth quarter and full year sales for 2021 on Tuesday, January 4. Forecasters estimate monthly sales totals, based on industry reports, historical data, and online purchases during the month.

In a joint auto sales forecast, JD Power and LMC Automotive say they expect US auto sales of about 1.2 million in December, down 20.5% from December 2020. TrueCar Inc has a lower auto sales forecast for December of around 1.1 million. This would be down 27% from a year ago.

For the year as a whole, JD Power and LMC forecast 2021 auto sales of just under 15 million, up 4.2% from 2021. In December, six consecutive months, US auto sales fell below the month of the previous year, according to Thomas King, president of the data and analytics division at JD Power.

Earlier this month, Cox Automotive separately said it expects sales for the year 2021 to be in the 14.8 million to 15 million range.

To put that in context, US auto sales for all of 2020 were around 14.6 million, down 15.1% from just over 17 million in 2019, before COVID; 2019 was a record fifth consecutive year with auto sales in the United States exceeding 17 million. The all-time record was around 17.6 million in 2016.

Auto sales in the United States in 2021 have started off more promisingly, especially compared to 2020 lows.

Due to the COVID-19 pandemic, dealership showrooms were closed in many states in the spring of 2020, and North American auto assembly plants were closed for weeks, followed by a slow rise to revert to pre-COVID monthly production figures.

The shortage of computer chips began to weigh on new vehicle production late last year and continued into 2021, with ups and downs, mostly downs. Analysts said the supply of chips appears to have at least bottomed out, and at least the shortage is unlikely to get worse.

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