Cox Automotive has predicted that November’s new-car sales will be 10.8% higher than in 2021. This is a surprising shift in tone from earlier this year, when the media company expected numbers to fall substantially below last year’s.
Although the communications brand saw a slight decrease in the seasonally adjusted annual rate from October (reduced to 14.3 million from 14.9 million), overall it appears that the auto industry performance is on track to overcome the COVID slump in new-car sales.
This is an encouraging development for both automakers and dealerships, who have struggled to navigate post-COVID manufacturing disruptions, supply chain issues and cautious consumers. Computer chip shortages and factory disruptions in China, where lockdowns are still frequent, forced manufacturers to scale back production over the last two years. However, Cox analysts noted that the availability of parts and materials has improved in 2022, allowing carmakers to raise output caps. In turn the new supply allowed dealerships to finally restock their inventories, driving down prices and increase new-car sales. Cox senior economist Charles Chesbrough stated that, “the improving supply situation is likely something dealers and consumers alike are thankful for this year.”
The supply chain recovery has been driven by reduced shipping rates, tax incentives and normalization in workflows. Rates for overseas shipping have decreased, policies such as the Inflation Reduction Act have encouraged domestic output and factories have been able to catch up on orders.
Although the Cox report promises economic relief, the company’s wording is noticeably tempered. In 2019, U.S. automakers sold over 17 million vehicles for the fifth year in a row. Meanwhile, it remains unclear if manufacturers will surpass last year’s 15 million new-car sales total. While sales volume has improved since the pandemic, it will be some time before the industry reaches a full recovery.
Did you enjoy this article? Please share your thoughts, comments, or questions regarding this topic by connecting with us at firstname.lastname@example.org.