DETROIT–With credit unions continuing to post record loan numbers, and with CUs cumulatively the largest auto lender in the U.S., U.S. auto sales are projected to total 13.7 million vehicles in 2022, the lowest figure in more than a decade and an 8% decrease from 2021, according to a joint forecast by J.D. Power and LMC Automotive.
Prior to the pandemic, auto sales were approximately 17 million units annually. As 2023 gets underway, some supply chain issues have now been addressed and employment remains strong, which should be make for a rebound, but higher interest rates and higher prices are combining to mute sales.
The forecast for the new year remains mixed, according to analysts, especially as the average price paid for a vehicle in December was a near record high of $46,382, according to J.D. Power.
“Inventory levels are bouncing back, putting pressure on car companies to resist the kinds of profit-damaging discounts that have been historically used to counter slowing demand,” The Wall Street Journal reported. “Still, there are early signs that demand might be slowing, even for the hottest car makers.”
The 2023 Forecast
While increasingly popular, electric vehicle sales are expected to suffer due to a range of factors, including rising prices for raw materials used in lithium-ion batteries, with some warning of a looming battery shortage.
Falling used-car values are also discouraging to potential buyers, who have trade-ins and are looking to use them to offset the higher cost of a new vehicle, the Journal reported.
The Journal cited research by Edmunds that predicts new-car sales will hit 14.8 million in 2023, a marginal increase from last year but well below prepandemic levels.
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