2022 car sales expected to be worse than 2020

Automakers are expected to sell just under 14 million new vehicles in 2022, the lowest sales in more than a decade, according to estimates from the Kelley Blue Book released this week.

The automaker will report full year, fourth quarter and monthly sales next week. For the full year, he expects to sell nearly 13.9 million units, the lowest level seen in the industry since his 12.7 million sales in 2011, when the U.S. economy was still recovering from the Great Recession. is. Sales in the 2020 pandemic year were 14.6 million units.

The decline is a result of supply chain issues, which are now lowering demand due to rising prices and interest rates. Demand is starting to soften in an environment of rising interest rates as supply begins to slowly recover for some automakers.

“There weren’t as many giant red ribbons this December as dealers like,” said Charles Chesbrough, senior economist at Cox Automotive, the automotive information company that owns Kelly Blue Book, in a statement. . “Rising interest rates now appear to be holding back demand in the retail auto market given that supply levels have improved significantly. pools are shrinking.”

The Federal Reserve has raised interest rates throughout the year to keep inflation in check. According to CNBC, the Fed recently raised its base rate by half a percentage point between its target of 4.25% and 4.5%, the highest level in 15 years.

Cox said the rise has pushed the cost of auto loans to the highest level in more than 20 years, pushing some shoppers out of the market. In fact, since October, the sales pace has dropped significantly to nearly 2 million units of his.

Heading into 2023, Cox analysts and others expect economic growth to slow given high interest rates. Cox said new car sales should “increase modestly,” and fleet sales are expected to increase.

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