Menu Close

Chip Shortage: New car sales to fall 15.2m, consumers will face expensive 2022 ─Experts

Vehicle Manufacturing Plant

 *Automotive experts say 2022 new car sales will probably fall to 15.2 million, not because of a lack of buyers but because of a lack of vehicles, as the chip shortage may persist for several more months

Isola Moses | ConsumerConnect

Consumers looking for new cars are probably wondering when the global automobile market will get back to normal, with an adequate selection and prices at or below the sticker price.

Given the nature of the shortage of chips and the overall supply chain shortages that go beyond chips, experts have said that it is probably a safe bet to say that the industry  would be fortunate to get back to a satisfactory supply situation as it were, agency report said.

According to automotive experts, it won’t happen anytime soon.

Chip automotive WiFi

Karl Brauer, Executive Analyst at Iseecars.com, in an interview with ConsumerAffairs, said: “It’s impossible to know for sure, but just given the nature of the shortage of chips and the overall supply chain shortages that go beyond chips, it’s probably a safe bet to say that we would be lucky to get back to a satisfactory supply situation in six months, and it might take as long as 12 months.”

Likewise, the automotive experts at Edmunds concur, report said.

They maintian that 2022 new car sales will probably fall to 15.2 million, not because of a lack of buyers but because of a lack of vehicles.

Jessica Caldwell, Edmunds’ Executive Director of Insights, said that every automaker is at the mercy of their suppliers, especially computer chip manufacturers.

Caldwell stated: “Sales have been depressed since the spring, but consumer appetite for new vehicles continues to run high, which will only serve to build up deferred demand next year and beyond.

“In 2022 there won’t be a question of how many new vehicles consumers will buy, but how many vehicles automakers can actually produce.”

Expect to pay a premium price

It was also gathered that all of this means that automobile consumers who purchase new cars in 2022 will pay a premium price.

So far, buyers have not balked at skyrocketing prices that average around 11 percent above sticker price, according to Brauer.

Edmunds data also revealed that average transaction prices for new vehicles continued to hit record levels in the fourth quarter, climbing to $45,872 November 2021, compared to $39,984 November 2020.

In many cases, consumers are paying more because they are purchasing higher trim levels with more expensive features, according to report.

Experts also predict there will be fewer leased vehicles in 2022, a trend that began this year. With low inventories, dealers won’t be encouraging leases by providing incentives.

Downside to leasing

Savvy consumers may also be less likely to consider a lease in 2022 because the residual value of the vehicle at the end of the lease will be set by today’s inflated values for used cars. It’s difficult to predict where used car prices will be 36 months from now.

Ivan Drury, Edmunds’ Senior Manager of Insights, also stated: “Consumers who are planning on making a vehicle purchase in 2022 must prepare for a much different market and car shopping experience compared to years past.”

On the whole, competition for new vehicles will be fierce as inventory shortages persist, experts noted.

It could cause some buyers to consider an electric vehicle since automakers may be producing more of them in the coming year, report said.

Kindly Share This Story

Kindly share this story