New car and truck sales fell to their lowest level in a decade last year as a global shortage of computer chips and rising interest rates raised the cost of purchasing vehicles.
Analysts expect the auto industry to sell fewer than 14 million light trucks and cars in the United States in 2022. That would be a decline of more than one million vehicles from 2021 and about 2 million compared to the pre-pandemic figure of about 17 million. ,
Automakers began reporting their year-end sales totals on Wednesday, and if Dore’s forecast is confirmed, last year’s sales totals will be the lowest since 2011, when the industry was just recovering from the financial crisis. Just started to recover and sold 12.7 million new cars. and trucks
“It appears that rising interest rates are now constraining demand in the retail auto market,” Charles Chesbrough, senior economist at market researcher Cox Automotive, said in a statement. “With record-high prices and high loan rates, the pool of potential new-vehicle buyers is shrinking.”
Tesla on Monday forecast a 40 percent increase in its global sales for 2022, but its deliveries in the last three months of the year fell short of analysts’ expectations. The company’s stock, which ended last year rumbling 65 per cent, fell nearly 12 per cent on Tuesday.
And Rivian, a smaller electric vehicle company, said Tuesday it was several hundred vehicles behind its goal to make 25,000 trucks, sport-utility vehicles and vans in 2022.
Other established automakers are expected to report significant declines for 2022 when they release their totals on Wednesday and Thursday, in the case of Ford Motor.
The auto industry has been disrupted for the past three years: first by the coronavirus pandemic, which forced manufacturers to idle their factories for two months in 2020, and then by a shortage of computer chips that has crippled worldwide auto manufacturing since early 2021. production has been disrupted.
Chip shortages have eased, but still some automakers temporarily slowed or stopped production at the time last year. In the case of electric cars and trucks – the fastest growing segment of the industry – many automakers are also struggling to get enough batteries. This means some buyers are waiting months for some models like Ford’s F-150 Lightning and GM’s Hummer pickup truck.
Many consumers are eager to buy a new vehicle, but they are turned away from showrooms because of chip shortages that have increased prices or the car they want is not available. The Federal Reserve’s drive to raise interest rates in an effort to slow inflation has also effectively increased the cost of purchasing a vehicle as many people have to borrow money to buy a new car.
According to Edmunds, another market researcher, US consumers paid an average of $47,681 for new vehicles in November, the most recent month for which data is available. This is a record high for November 2021 and above $45,872.
Evan Drury, Edmunds Director of Insights, said, “Emerging interest rates are increasingly on top for consumers in all aspects of life, including auto loans.” “Even rates that are close to or slightly below average can add up to thousands more in interest paid than in previous years.”
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