U.S. auto retail sales expected to edge up in 2022, forecaster says

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“In other words: we’re a limited supply market,” King said. “We’ve been since August. It’s been around a million units a month and the industry is on an entry, exit basis.”

Total annual light vehicle sales in the United States edged above 15 million in 2021 and were up 3.3% from 2020.

King pointed out that the current pace of sales has nothing to do with demand but rather “a function of many vehicles being produced and appearing in dealerships each month.”

King said inventory conditions would likely remain the same through at least the third quarter.

“This environment is going to last for a while,” he said.

King said gross profit combined with F&I per vehicle is expected to increase to $4,100 to $4,700 per retail vehicle sale in 2022 from $3,700 per retail vehicle in 2021.

“If you have limited supply and high demand, you get remarkable financial results,” King said.

With higher profits per vehicle multiplied by higher sales volumes, “this is going to be, however you cut it, a banner year for retailers,” King said. “So an increase from $48 billion to about $55 billion to $65 billion. So as a percentage, a very, very robust profit environment.”

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