American auto market still suffering from lack of supply: Cox Report

American sales numbers, which are closely tied to Canadian market conditions, are still facing supply pressures that have been constant since at least January. According to the Cox Automotive June sales forecast released today, “the seasonally adjusted annual rate (SAAR) of new-vehicle sales this month is expected to hit 13.8 million, up from last month’s 12.7 million pace but well below last year’s 15.5 million level.”

The numbers are showing significant decline from last year, however they are recovering from the volumes in previous months. The report states, “The sales volume in June is expected to finish near 1.2 million units, down 7.5% from last year’s volume of 1.3 million sales. However, this is an increase of 7.5% from May’s volume of nearly 1.1 million units. There is one more selling day this June than last year and the same number as last month.”

Tight inventory continues to negatively impact new-vehicle sales. “Since June of 2021, monthly sales volume has been stuck in a tight window, with little deviation, averaging 1.1 million units a month and peaking only at 1.3 million in June 2021. With no clear timeline for any notable recovery in new-vehicle inventory levels, Cox Automotive is lowering its full-year 2022 U.S. auto sales forecast to 14.4 million units, down from its current forecast of 15.3 million. The current forecast now is for new-vehicle sales volumes to fall below the 14.6 million sold in 2020, when the market was initially ravaged by the global COVID pandemic.”

“Last June, I wrote that the concern about the supply situation could not be overstated, as we were in untested territory for the market,” said Charlie Chesbrough, senior economist, Cox Automotive. “That sentiment remains, as there has been no significant shift in the conditions on the ground since last fall. Even though economic conditions have worsened in the past months, the lack of supply is still the greatest headwind facing the auto industry today.”

In terms of individual brand performance, General Motors is forecast to outsell Toyota in Q2, jumping back into the top-seller position, and Tesla is the only major brand to increase sales year over year in the first half. The report predicts “Honda, Nissan and VW all see first-half sales drops in excess of 30% year-over-year.”

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