It’s official: We’re in a slump. Consumers and Dealers Are Facing Tight New-Vehicle Inventory and Sky-High Prices
As we enter Q4, the hangover of the year’s tight inventory and high prices continue to throttle new-vehicle sales. A new forecast by Cox Automotive clearly shows a market still held in check by limited new-vehicle supply and high prices. The November sales pace is down notably year over year, but should show a slight improvement as select manufacturers have been able to modestly boost inventory and, as a result, sales.
Cox Automotive forecasts U.S. auto sales to show a market held in check by limited new-vehicle supply and high prices.
“The market is stuck in low gear,” noted Cox Automotive Senior Economist Charlie Chesbrough. “We believe there are potential buyers out there, but many are waiting on the sidelines, put off by limited selection and high prices.”
While the first half of 2021 was hopeful, new-vehicle sales have slowed as inventory woes persist into Q4. Prices are high, and shoppers are well aware, according to fresh research from Cox Automotive. November’s seasonally adjusted annual rate (SAAR) of sales finished near 13.4 million, down 16% from last year when the sales pace was 15.9 million. On the plus side, sales volume is expected to increase slightly from November, rising less than a percent to reach a forecasted 1.05 million. There were 24 selling days this November, one more than last year, but the extra day had minimal impact on the overall volume.
What’s in store for 2021’s Holiday Season
With the year-end holiday season in full swing, the lack of available new-vehicle inventory will be troublesome for dealers and consumers alike. Holiday sales are a critical selling period, and December is often one of the biggest volume months of the year, particularly for luxury products. This year a year-end bump in sales seems unlikely.
Though the market will continue to be supply constrained well into next year, the worst inventory issues are likely in the rear-view mirror. Many OEMs have stated that they expect continued—but slow—improvement in production and distribution as the global supply chain works out the post-pandemic kinks. And sales data suggest the market may have hit bottom in September with a SAAR of 12.2 million. The sales pace has been improving since then. New variants of the coronavirus, however, will likely continue to roil the auto market well into 2022.
November 2021 New-Vehicle Sales Forecast