Edmunds analysts reckon the US automotive industry faces yet another challenging year marked by inventory shortages amid strong consumer demand, forecasting 15.2m new cars would be sold in 2022m, up 1.2% from their estimate of 15m new vehicle sales in 2021.
“2021 marked an unusual year of highs and lows for the industry: Every automaker across the board struggled at the mercy of their suppliers and logistics amid chip and inventory shortages while simultaneously enjoying skyrocketing consumer demand and minimised spending on incentives,” said Jessica Caldwell, Edmunds’ executive director of insights. “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.”
Consumer appetite for new vehicles continues to run high, which will only serve to build up deferred demand next year.
Car shoppers are expected to pay higher prices for more option-rich, higher-trim vehicles than ever before.
Data reveals average transaction prices for new vehicles continue to hit record levels, climbing to US$45,872 in November 2021 compared to $39,984 in November 2020 and consumers are paying above MSRP for new vehicles. In November, the average MSRP was $662 less than average transaction prices on a national level.
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Vehicles available for sale are “richly equipped” with more features. In 2016 the average vehicle cost 30% above base MSRP; in 2021 that figure is on trend to reach 38%.
Edmunds said leasing is becoming less popular for a number of reasons: Automakers have less reason to incentivise leasing as inventories remain low, and since many vehicles that are available to purchase are heavily equipped or higher trim levels, they’re less likely to be targeted by automakers for leasing programmes as they typically suffer higher depreciation than their mid- to lower-level trim counterparts.
Lease penetration fell to 23% in November 2021, down from 28% in November 2019 with the trend set to continue.
Analysts estimate the US EV market share will climb to 4% (4.6% retail) in 2022, eclipsing 600,000 units for the first time.
A number of new entrants in the EV pickup market will drum up a lot of marketing buzz, but Edmunds expects the Ford F-150 Lightning will be the champion of the segment if it can launch on time and with sufficient quantity.
Edmunds analysts say Tesla’s market share is expected to make up less than half of the EV market (46%) in 2022 compared to 65% in 2021, as new players enter the segment.
Consumers will entertain “build-to-order” as long as inventory challenges remain.
According to a recent Edmunds survey, more than half of consumers said they would be willing to build to order their vehicle, and male respondents were more open to the idea — 59% of men responded positively compared with 52% of women.
Used vehicle prices will surpass the $30,000 mark for the first time in 2022.
Used vehicles will continue to draw more shoppers as inventory shortages squeeze the new vehicle market. Analysts note that fewer off-rental and off-lease vehicles will push dealers to lean more heavily on sourcing near-new units from prior customers and trade-ins.