Dealer inventory levels across the country remain very low due to a shortage of semiconductor chips that led to sporadic factory shutdowns and vehicle inventory depletion in 2021.
Michael Wayland / CNBC
Detroit-Christmas wreaths and lights General Motors Although a Metro Detroit dealer, this holiday season rarely hosts this lot or any other event like this across the country.
Instead of new car buyers flocking to dealer lots to take advantage of holidays and the holiday season, many dealers almost empty both their cars and their customers. And if a consumer finds a car, some new cars and trucks should expect to pay a price close to the price of the sticker.
JD Power reports that about 89% of new cars purchased by consumers were sold near or above the manufacturer’s suggested retail price (also known as MSRP or sticker price). This is compared to 12% in December 2019.
But it wasn’t the Grinch who stole this holiday season, Shortage of semiconductor chips This has caused havoc across the global automotive industry this year, leading to sporadic factory closures and vehicle inventory depletion.
“I don’t remember these seasons at all,” said Michelle Krebs, executive analyst at Cox Automotive, who has been tracking the industry for 40 years. “We’ve never seen anything like this. Usually the problem is that inventory is outpacing demand. So this is completely annoying.”
Dealer lots and deals, also known as incentives, have hit record lows this year due to a shortage of parts and are not yet over in 2022, according to industry analysts.
According to Cox Automotive, about 1 million new cars will be manufactured this year, and consumers will be able to buy 1.8 million less new cars this year, 2.5 million less than 2019. JD Power reports that this month’s national car inventory is 850,000 and retail sales are typically 1.4 million.
Tyson Jominy, vice president of data and analytics at JD Power, said: “I don’t remember this until now.”
and Lithia MotorsA sales consultant who owns Buick and GMC stores in Metro Detroit has volunteered to take service customers home due to a shortage of new car shoppers.
“I think we’re still on a difficult path when it comes to inventory control, shopping, and finding exactly what you want at the price you want,” said Jeff Schster, president of the Americas. “But at least for now, it doesn’t seem to get worse.”
As automakers have reduced incentives to seduce buyers and dealers have vowed to have fewer cars on hand, record or near-record pricing for new cars is not expected to change anytime soon.
The low supply has helped record dealer profits, as consumers are willing to pay more for new cars. Some dealers are adding markup, or “market adjustments,” to high-demand products. This is not unprecedented, but analysts say the quantity and range are unprecedented.
“It’s very different from what it used to be,” said Jominie.
Cox Automotive Report StellantisFormerly Fiat Chrysler, it now has the most vehicle supply days. Other brands such as luxury brands Audi, Cadillac and Infiniti are also above the industry average.
According to Cox, Toyota, Lexus, Land Rover, Honda and Kia have the shortest supply days in vehicle inventory.
“This is not a typical holiday season,” said Jessica Caldwell, executive director of insights at auto-insight company Edmonds. “No brand really has an inventory that looks like it’s in a good place.”
Industry analysts and forecasters are mixed in their 2022 sales forecasts due to market volatility. They range from about 15.2 million to over 16 million, up from an estimated 15 million this year.
Looking for a new car?Don’t expect New Year holiday transactions
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