U.S. car sales will decline in December due to tight supply

Jd Power and LMC Automotive said in a report released Thursday that U.S. auto retail sales are expected to decline in December due to supply shortages and strong demand leading to soaring prices.

New car retail sales are likely to decline 17.7 percent from a year earlier to 2,923,600 units, the report said.

Thomas King, president of JD Powers' data and analytics division, said: "Prices continue to rise due to limited supply and strong demand. ”

After rising raw material prices, automakers of all sizes are grappling with the strongest inflationary pressures in three decades.

The average trading price is expected to reach $45,743, breaking the $45,000 mark for the first time, 20% higher than when the price first broke through the $38,000 level in December 2020.

After a 10.1 percent increase in October, auto plant production rose 2.2 percent last month. However, due to the global semiconductor shortage, vehicle production in November was still 5.4% lower than the same period last year.

Total new vehicle sales in December 2021, both retail and non-retail transactions, are expected to reach 1,245,600 units, down 20.5 percent from last year.

Jeff Schuster, president of LMC Automotive's Americas Operations and Global Automotive Forecasting, said: "The modest improvement in chip shortages may be masked by the risks posed by the surge in cases of the Omicron variant COVID-19. ”

The average retail price of new cars is expected to reach $45,743 in December, up from a high of $44,515 in November.

Total new vehicle sales are expected to grow seasonally at an annualized rate of 13 million units, down 3.5 million units from 2020.

Despite the increased risks, consultants expect global light vehicle sales to rise to 86 million units in 2022, up 750,000 units from the previous month.