Car prices continue to rise across the United States but as fears over the economy grow, new car sales have started to fall.
A joint forecast from J.D. Power and LMC Automotive suggests that retail sales of new vehicles this month will hit approximately 965,300 vehicles. That is an 18.2 percent decrease compared to June 2021. Total new-vehicle sales including retail and non-retail transactions are tipped to reach 1,133,000 units this month which itself would be a 15.8 percent decline from the same month last year.
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Total new-vehicle sales are expected to end the second quarter at 3,488,800 units or 20.5 percent less than Q2 2021. In addition, new-vehicle total sales for the first six months of 2022 are projected to top out at 6,781,300 units which is an 18.7 percent decline from the first half of 2021 when adjusted for selling days.
These falling sales come in the midst of soaring prices. J.D. Power expects the average transaction price for the first six months of the year to reach a record of $44,907, a significant 17.5 percent increase from 2021. Retailer profits are also expected to soar from $2,206 per unit in the first half of 2021 to $4,774 for the first half of 2022.
The average transaction price of new vehicles purchased in June is expected to hit $45,844, an all-time high and while overall sales are down, consumers will spend roughly $44.3 billion on new vehicles this month.
“The inventory shortages that have depressed volumes, however driven up prices and profits, are showing no signs of improvement,” Thomas King, president of the data and analytics division at J.D. Power, said. “June 2022 is on track to be the eighth consecutive month that retail inventory closes below 900,000 units.”
Manufacturer discounts are expected to continue to erode. J.D. Power notes that the average incentive spend per vehicle is tracking towards $930 this month, a 59.4 percent decrease from a year ago.