J.D. Power and LMC Automotive have forecasted a decline in new-vehicle retail sales for February 2022, compared to February 2021.
Retail sales for last month are expected to reach 922,100 units, a decrease of 5.7% from February of last year, a statement from J.D. Power states.
Total new-vehicle sales for last month, including retail and non-retail, are projected to reach 1,057,300 units, an 11.1% decrease from the same month last year.
“What we’re seeing in February — sales being constrained by available inventory — is expected to continue in March,” said Thomas King, J.D. Power president of the data and analytics division. “The underlying question is which manufacturers will have the ability to produce enough vehicles to increase inventory levels. Ongoing supply chain disruptions, along with near-term announcements of production outages by several manufacturers, mean that the aggregate inventory situation is unlikely to change in March. For some manufacturers, the situation may deteriorate. This likely means that prices and per-unit profitability for retailers and manufacturers will likely remain healthy.”
King adds that retail inventory pacing below 900,000 units and nine consecutive months below one million units means “the new-vehicle supply situation is not displaying signs of near-term improvement.” Therefore, February sales were determined not by actual consumer demand but by the number of vehicles delivered to dealerships.
“Vehicles continue to sell quickly and a growing number of those vehicles have been ordered by buyers. This month, nearly 53% of vehicles will be sold within 10 days of arriving at a dealership, while the average number of days a new vehicle is in a dealer’s possession before being sold is on pace to be 20 days—down from 54 days a year ago,” King says in the statement.
Higher new-vehicle prices “mean that retail consumers are on track to spend a healthy $41.0 billion on new vehicles” in February, which is the highest on record for the month of February and 12.4% above February 2021.