Analysts predict that the sharp decline in U.S. auto sales in the first quarter was due to the low number of new cars on lots.

• According to industry analysts, U.S. new-vehicle sales in the first quarter of 2022 were likely to be below 3.3 million, representing a 14% decline from the same period in 2021.
• The global shortage of semiconductors is causing production disruptions for automakers.
• It is predicted that General Motors, Honda, and Nissan will experience a 20% or greater decline in first-quarter sales, while Ford will fare slightly better.

Car-shoppers are facing limited options and high prices due to the ongoing shortage of new vehicles, which is predicted to result in sharp sales declines for March and the first quarter, according to industry analysts.

According to Cox Automotive, Edmunds, and J.D. Power/LMC Automotive, first-quarter sales of cars, pickup trucks, and SUVs are predicted to be below 3.3 million, representing a decline of over 14% compared to the first quarter of 2021.

Edmunds predicts that some automakers, including Ford, General Motors, Nissan, and Volkswagen, will experience year-over-year sales declines of over 20% in the first quarter, with Ford and General Motors expected to fare slightly better.

Nearly $43,500 is the predicted average selling price of a new vehicle in the U.S. in March, a 15.4% increase from the same month last year, as TrueCar analysts reported.

The decline in projected sales in the quarter, including a drop of at least 24% in March, may be due to consumer concerns about inflation, particularly higher gas and vehicle prices. However, the main factor is the limited availability of new vehicles due to a global shortage of semiconductor chips.

In the first quarter, new vehicle sales were depressed due to the lack of inventory, despite skyrocketing gas prices being a top concern for consumers in March, according to Jessica Caldwell, Edmunds' executive director of insights.

According to Edmunds, the first-quarter auto sales are expected to decline by 15.2% year-over-year. The company stated that their inventories are extremely low, with only 20 days' supply of gas-powered vehicles and 21 days' worth of electric vehicles available. Automakers usually aim to maintain inventories that can last 60 to 70 days.

Automakers are facing additional supply challenges due to Russia's invasion of Ukraine, in addition to the ongoing Covid-related supply-chain disruptions.

If only automakers had more vehicles to sell, consumer demand for U.S. auto sales would likely be strong during the spring, according to Cox Automotive's senior economist, Charlie Chesborough.

Although there are low unemployment and low interest rates, sales will remain weak until automakers increase the number of vehicles on dealers' lots, according to Chesborough.

Be assured," he stated, "this market is operating at a slow pace.