U.S. auto market stuck in “low gear”

Tight inventory and high prices for automobiles in the United States continue to put a damper on new vehicle sales, as November’s seasonally adjusted annual rate (SAAR) of sales is forecasted to finish near 13.4 million—which would be an increase of 4,000 units or 0.4% from last month, but down 16% year-over-year from November 2020’s 15.9 million units.

That news comes according to Cox Automotive, which also predicts that sales volume will fall more than 12% from a year ago to finish near 1,050,000 units.

“The market is stuck in low gear,” said 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.”

The company said its research shows new vehicle sales slowed down after a strong first half of the year as inventory issues continue, and that consumers are well aware of the higher sticker prices.

“On the plus side, sales volume is expected to increase slightly from October, rising less than a percent to reach a forecasted 1.05 million,” said Cox Automotive in a news release. “There are 24 selling days this November, one more than last year, but the extra day will have minimal impact on the overall volume.”

Although the issue around vehicle inventory/supply constraints will persist into next year, Cox Automotive said 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,” said the company. “And sales data suggest the market may have hit bottom in September with a SAAR of 12.2 million.”

The sales pace is improving, but new variants of COVID-19—such as the Omicron—may continue to impact the auto market well into 2022.

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