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November 30, 2021

Limited supply, high prices, slow November US sales

Cox Automotive forecasts US auto sales to show a market held in check by limited new vehicle supply and high prices.

By Graeme Roberts

November auto sales, expected to be confirmed by many automakers later this week,  are forecast by Cox Automotive to show a market still held in check by limited new vehicle supply and high prices.

The November sales pace is expected to be down notably year over year, but should show a slight improvement from October, as some manufacturers have been able to modestly boost inventory and, as a result, sales.

“The market is stuck in low gear,” said Cox Automotive senior economist Charlie Chesbrough. “We believe there are potential buyers out there, but many are waiting on the sidelines, put off by limited selection and high prices.”

Cox Automotive forecasts US auto sales to show a market held in check by limited new-vehicle supply and high prices.

After a strong first half, new vehicle sales have slowed as inventory woes persist.

Prices are high, and shoppers are well aware. November’s seasonally adjusted annual rate (SAAR) of sales is forecast to finish near 13.4m, down 16% from last year when the sales pace was 15.9m. On the plus side, sales volume is expected to increase slightly from October, rising less than a percent to reach a forecasted 1.05m. There are 24 selling days this November, one more than last year, but the extra day will have minimal impact on the overall volume.

With the year end Christmas and New Year holiday season upon us, the lack of available new vehicle inventory will be troublesome for dealers and consumers alike.

Holiday sales are a critical selling period, and December is often one of the biggest volume months of the year, particularly for luxury products. This year a year end bump in sales seems unlikely.

Though the market will continue to be supply constrained well into next year, the worst inventory issues are likely past. Many OEMs have stated that they expect continued but slow improvement in production and distribution as the global supply chain works out the post-pandemic kinks.

And sales data suggest the market may have hit bottom in September with a SAAR of 12.2 million. The sales pace has been improving since then. New variants of the coronavirus, however, will likely continue to roil the auto market well into 2022.

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