Trending...
- Elder Abuse Case Against Healthy Traditions Owner Raises Questions As To The Dire Reality Of Abuse Against The Last Of The Baby Boomers - 149
- Notice: Hrm Queen Laurence I Assumes Crown Control & $317q Fund. 3bn Unopoly Shares Settled. Requisition Of Buckingham Palace & Windsor Castle Final - 103
- Pastor Saeed Abedini Releases THE TRUTH – Volume 1, A Deeply Personal Story of Faith, Struggle, and Redemption
TROY, Mich.--(BUSINESS WIRE)--J.D. Power:
The Retail Sales Forecast
New-vehicle retail sales for June 2022 are expected to decline when compared with June 2021, according to a joint forecast from J.D. Power and LMC Automotive. Retail sales of new vehicles this month are expected to reach 965,300 units, a 18.2% decrease compared with June 2021 when adjusted for selling days. June 2022 has 1 additional selling day compared to June 2021. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 15.0% from 2021.
New-vehicle retail sales in Q2 2022 are projected to reach 2,977,300 units, a 23.3% decrease from Q2 2021 when adjusted for selling days.
New-vehicle retail sales for the first six months 2022 are projected to reach 5,827,300 units, a 19.1% decrease from the first six months of 2021 when adjusted for selling days. The first half of 2021 was an all-time record for retail sales.
The Total Sales Forecast
Total new-vehicle sales for June 2022, including retail and non-retail transactions, are projected to reach 1,133,000 units, a 15.8% decrease from June 2021. Comparing the sales volume without adjusting for the number of selling days translates to a decrease of 12.4% from 2021.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 13.1 million units, down 2.3 million units from 2021.
New-vehicle total sales in Q2 2022 are projected to reach 3,488,800 units, a 20.5% decrease from Q2 2021 when adjusted for selling days.
New-vehicle total sales for the first half of 2022 are projected to reach 6,781,300 units, an 18.7% decrease from the first half of 2021 when adjusted for selling days.
The Takeaways
Thomas King, president of the data and analytics division at J.D. Power:
"The 2022 theme we have seen of sales quality over sales quantity is continuing in June. On a volume basis, June year-to-date retail sales will be just under 5.9 million units, a large decline of 19.1%. Excluding pandemic-affected 2020, this is the worst first six months' sales volume performance since 2011. However, from a profitability standpoint, the first half of 2022 has set records for both retailers and manufacturers as vehicle prices continue to rise, manufacturer discounts get ever smaller and retailer margins set new highs.
"The average transaction price for the first six months of 2022 is expected to reach a record of $44,907—a 17.5% increase from 2021. This is partially due to incentive spending per unit, expressed as a percentage of average vehicle MSRP, trending towards 2.4% for the first six months, down from 7.1% for the same time period in 2021.
"Total retailer profit per unit—inclusive of grosses and finance and insurance income from new-vehicle sales are expected to reach first-half record levels on both a per unit and total basis. Profit per unit for the first half of 2022 is trending to reach $4,774, up $2,206 from the same period in 2021, while total profits are expected to reach $27.8 billion, up $9.4 billion from 2021.
"The inventory shortages that have depressed volumes, however driven up prices and profits, are showing no signs of improvement. June 2022 is on track to be the eighth consecutive month that retail inventory closes below 900,000 units.
"For June, new-vehicle prices continue to set records, with the average transaction price expected to reach $45,844—a 14.5% increase from a year ago and the highest level on record. Consequently, even though the sales pace is down 18.2% year over year, consumers will spend $44.3 billion on new vehicles this month, the second-highest level ever for the month of June but slightly down 2.7% from June 2021 due to reduced volume.
More on Michimich.com
"Total retailer profit per unit—inclusive of grosses and finance and insurance income—is on pace to reach a monthly record of $5,123, an increase of $1,174 from a year ago. Eight of the past nine months have seen retailer profit per unit at or above $5,000. This elevated per-unit profit level is more than offsetting the drop in sales volume as total aggregate retailer profits from new-vehicle sales for the month of June is projected to be up 10.3% from June 2021, reaching $4.9 billion, the best June ever and the fourth-highest amount of any month on record.
"Due to the ongoing inventory constraints, discounts from manufacturers continue to erode. The average incentive spend per vehicle is tracking toward $930, a decrease of 59.4% from a year ago and the second consecutive month under $1,000. Incentive spending per vehicle expressed as a percentage of the average vehicle MSRP is trending toward a record low of 2.0%, down 3.4 percentage points from June 2021 and the fifth consecutive month below 3.0%. One of the factors contributing to the reduction in incentive spending is the absence of discounts on vehicles that are leased. This month, leasing will account for just 18% of retail sales. In June 2019, leases accounted for 30% of all new-vehicle retail sales."
Average interest rates for new vehicle loans continue to accelerate and are expected to increase 74 basis points from a year ago to 5.01% in June.
However, elevated used-vehicle values continue to help affordability for new-vehicle buyers who have a vehicle to trade in. The average trade-in equity for June is trending towards a record high of $10,381, a 49.2% increase from a year ago and the first time above $10,000.
Despite record level trade-in values, the average monthly finance payment in June is on pace to hit a record high of $698, up $79 from June 2021. That translates to a 12.8% increase in monthly payments from a year ago, which is just below the 14.5% increase in transaction prices.
"Even at these record pricing levels, vehicles continue to sell quickly and a significant number of vehicles are being ordered—or purchased—by buyers before they arrive at the dealership. This month, 56% 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 19 days—down from 37 days a year ago.
"Looking forward, while higher interest rates and economic concerns represent directional headwinds for the industry, consumer demand remains considerably higher than available supply. With each additional month of inventory constraints, pent-up demand for new vehicles is building ever larger—and that demand will insulate the industry from the effects of these economic headwinds. As new-vehicle availability eventually improves, some softening of the current record per unit pricing and profitability may occur but will be mitigated by a return to higher monthly sales volumes."
Sales & SAAR Comparison
1 Figures cited for June 2022 are forecasted based on the first 16 selling days of the month.
2 June 2022 has 26 selling days, one more than June 2021.
The Details
Global Sales Outlook
Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:
"Global light-vehicle sales in May were 6.2 million units, down 10% year over year but an improvement from a 26% drop in April thanks to strength in Asia and some base effect from weakness in May 2021. The selling rate was 75.7 million units, 7 million lower than May 2021 but an increase of 8 million units from April. Of the major markets, India led the recovery, up 189% from a year ago, while the ASEAN market was up 12%. China was down 8%, ahead of any potential effect from the new personal vehicle incentive that is expected to positively influence near-term performance.
"With positive year-over-year growth expected in China and significant recovery from weakness last June in Japan, Korea and the ASEAN market, global sales volume is expected to be down just 5% in June from a year ago. The selling rate in June is expected to reach 79 million units, the highest level since January. A mixed global picture remains, as continued weakness in Europe and the United States is holding down the boost in Asia.
"Despite China now expected to increase 2%, global sales in 2022 are expected to be flat vs. 2021, at 81.4 million units. We have made additional cuts in Europe and North America, which have offset gains elsewhere. The auto outlook is now hampered by both supply and demand issues, as consumers struggle globally with high inflation and low vehicle inventory. Nearly 30 million units of demand have been lost since the beginning of the pandemic and much of that may end of being a permanent loss."
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.com
Contacts
Geno Effler, J.D. Power; West Coast; 714-621-6224; media.relations@jdpa.com
Emmie Littlejohn, LMC Automotive; Troy, Mich.; 248-817-2100; elittlejohn@lmc-auto.com
The Retail Sales Forecast
New-vehicle retail sales for June 2022 are expected to decline when compared with June 2021, according to a joint forecast from J.D. Power and LMC Automotive. Retail sales of new vehicles this month are expected to reach 965,300 units, a 18.2% decrease compared with June 2021 when adjusted for selling days. June 2022 has 1 additional selling day compared to June 2021. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 15.0% from 2021.
New-vehicle retail sales in Q2 2022 are projected to reach 2,977,300 units, a 23.3% decrease from Q2 2021 when adjusted for selling days.
New-vehicle retail sales for the first six months 2022 are projected to reach 5,827,300 units, a 19.1% decrease from the first six months of 2021 when adjusted for selling days. The first half of 2021 was an all-time record for retail sales.
The Total Sales Forecast
Total new-vehicle sales for June 2022, including retail and non-retail transactions, are projected to reach 1,133,000 units, a 15.8% decrease from June 2021. Comparing the sales volume without adjusting for the number of selling days translates to a decrease of 12.4% from 2021.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 13.1 million units, down 2.3 million units from 2021.
New-vehicle total sales in Q2 2022 are projected to reach 3,488,800 units, a 20.5% decrease from Q2 2021 when adjusted for selling days.
New-vehicle total sales for the first half of 2022 are projected to reach 6,781,300 units, an 18.7% decrease from the first half of 2021 when adjusted for selling days.
The Takeaways
Thomas King, president of the data and analytics division at J.D. Power:
"The 2022 theme we have seen of sales quality over sales quantity is continuing in June. On a volume basis, June year-to-date retail sales will be just under 5.9 million units, a large decline of 19.1%. Excluding pandemic-affected 2020, this is the worst first six months' sales volume performance since 2011. However, from a profitability standpoint, the first half of 2022 has set records for both retailers and manufacturers as vehicle prices continue to rise, manufacturer discounts get ever smaller and retailer margins set new highs.
"The average transaction price for the first six months of 2022 is expected to reach a record of $44,907—a 17.5% increase from 2021. This is partially due to incentive spending per unit, expressed as a percentage of average vehicle MSRP, trending towards 2.4% for the first six months, down from 7.1% for the same time period in 2021.
"Total retailer profit per unit—inclusive of grosses and finance and insurance income from new-vehicle sales are expected to reach first-half record levels on both a per unit and total basis. Profit per unit for the first half of 2022 is trending to reach $4,774, up $2,206 from the same period in 2021, while total profits are expected to reach $27.8 billion, up $9.4 billion from 2021.
"The inventory shortages that have depressed volumes, however driven up prices and profits, are showing no signs of improvement. June 2022 is on track to be the eighth consecutive month that retail inventory closes below 900,000 units.
"For June, new-vehicle prices continue to set records, with the average transaction price expected to reach $45,844—a 14.5% increase from a year ago and the highest level on record. Consequently, even though the sales pace is down 18.2% year over year, consumers will spend $44.3 billion on new vehicles this month, the second-highest level ever for the month of June but slightly down 2.7% from June 2021 due to reduced volume.
More on Michimich.com
- Training Lofts Launches $1,099 Unlimited Training Membership Featuring Semi-Private Coaching, Nutrition Support, and Recovery Services
- Are Kids Becoming Overscheduled? New Tool Helps Parents Evaluate Activity Balance
- Announcing the Keynote Lineup for PLM Road Map & PDT North America 2026
- American Properties Realty, Inc. Leadership Attends NAHB International Builders' Show in Florida
- American Plastic Solutions Announces Versatile Plastic Plating Tanks and Enclosures
"Total retailer profit per unit—inclusive of grosses and finance and insurance income—is on pace to reach a monthly record of $5,123, an increase of $1,174 from a year ago. Eight of the past nine months have seen retailer profit per unit at or above $5,000. This elevated per-unit profit level is more than offsetting the drop in sales volume as total aggregate retailer profits from new-vehicle sales for the month of June is projected to be up 10.3% from June 2021, reaching $4.9 billion, the best June ever and the fourth-highest amount of any month on record.
"Due to the ongoing inventory constraints, discounts from manufacturers continue to erode. The average incentive spend per vehicle is tracking toward $930, a decrease of 59.4% from a year ago and the second consecutive month under $1,000. Incentive spending per vehicle expressed as a percentage of the average vehicle MSRP is trending toward a record low of 2.0%, down 3.4 percentage points from June 2021 and the fifth consecutive month below 3.0%. One of the factors contributing to the reduction in incentive spending is the absence of discounts on vehicles that are leased. This month, leasing will account for just 18% of retail sales. In June 2019, leases accounted for 30% of all new-vehicle retail sales."
Average interest rates for new vehicle loans continue to accelerate and are expected to increase 74 basis points from a year ago to 5.01% in June.
However, elevated used-vehicle values continue to help affordability for new-vehicle buyers who have a vehicle to trade in. The average trade-in equity for June is trending towards a record high of $10,381, a 49.2% increase from a year ago and the first time above $10,000.
Despite record level trade-in values, the average monthly finance payment in June is on pace to hit a record high of $698, up $79 from June 2021. That translates to a 12.8% increase in monthly payments from a year ago, which is just below the 14.5% increase in transaction prices.
"Even at these record pricing levels, vehicles continue to sell quickly and a significant number of vehicles are being ordered—or purchased—by buyers before they arrive at the dealership. This month, 56% 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 19 days—down from 37 days a year ago.
"Looking forward, while higher interest rates and economic concerns represent directional headwinds for the industry, consumer demand remains considerably higher than available supply. With each additional month of inventory constraints, pent-up demand for new vehicles is building ever larger—and that demand will insulate the industry from the effects of these economic headwinds. As new-vehicle availability eventually improves, some softening of the current record per unit pricing and profitability may occur but will be mitigated by a return to higher monthly sales volumes."
Sales & SAAR Comparison
U.S. New Vehicle | June 20221, 2 | May 2022 | June 2021 |
Retail Sales | 965,327 units (-18.2% lower than June 2021)2 | 945,388 units | 1,135,138 units |
Total Sales | More on Michimich.com
1,132,981 units (-15.8% lower June 2021)2 | 1,110,426 units | 1,293,272 units |
Retail SAAR | 11.3 million units | 10.9 million units | 13.6 million units |
Total SAAR | 13.1 million units | 12.7 million units | 15.4 million units |
1 Figures cited for June 2022 are forecasted based on the first 16 selling days of the month.
2 June 2022 has 26 selling days, one more than June 2021.
The Details
- The average new-vehicle retail transaction price in June is expected to reach $45,844. The previous high for any month—$45,502—was set in May 2022.
- Average incentive spending per unit in June is expected to reach $930, down from $2,291 in June 2021. Spending as a percentage of the average MSRP is expected to fall to a record low of 2.0%, down 3.4 percentage points from June 2021.
- Average incentive spending per unit on trucks/SUVs in June is expected to be $971, down $1,266 from a year ago, while the average spending on cars is expected to be $869, down $1,592 from a year ago.
- Buyers are on pace to spend $44.3 billion on new vehicles, down $1.2 billion from June 2021.
- Truck/SUVs are on pace to account for 78.9% of new-vehicle retail sales in June.
- Fleet sales are expected to total 167,700 units in June, up 1.9% from June 2021 on a selling day adjusted basis. Fleet volume is expected to account for 15% of total light-vehicle sales, up from 12% a year ago.
Global Sales Outlook
Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:
"Global light-vehicle sales in May were 6.2 million units, down 10% year over year but an improvement from a 26% drop in April thanks to strength in Asia and some base effect from weakness in May 2021. The selling rate was 75.7 million units, 7 million lower than May 2021 but an increase of 8 million units from April. Of the major markets, India led the recovery, up 189% from a year ago, while the ASEAN market was up 12%. China was down 8%, ahead of any potential effect from the new personal vehicle incentive that is expected to positively influence near-term performance.
"With positive year-over-year growth expected in China and significant recovery from weakness last June in Japan, Korea and the ASEAN market, global sales volume is expected to be down just 5% in June from a year ago. The selling rate in June is expected to reach 79 million units, the highest level since January. A mixed global picture remains, as continued weakness in Europe and the United States is holding down the boost in Asia.
"Despite China now expected to increase 2%, global sales in 2022 are expected to be flat vs. 2021, at 81.4 million units. We have made additional cuts in Europe and North America, which have offset gains elsewhere. The auto outlook is now hampered by both supply and demand issues, as consumers struggle globally with high inflation and low vehicle inventory. Nearly 30 million units of demand have been lost since the beginning of the pandemic and much of that may end of being a permanent loss."
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.com
Contacts
Geno Effler, J.D. Power; West Coast; 714-621-6224; media.relations@jdpa.com
Emmie Littlejohn, LMC Automotive; Troy, Mich.; 248-817-2100; elittlejohn@lmc-auto.com
0 Comments
Latest on Michimich.com
- Energywise Solutions and Pickleball Pros Partner to Bring More Energy and Visibility to Pickleball Clubs
- Buildout Launches CRM, Completing the Industry's First AI-Powered End-to-End Deal Engine for CRE
- The Franchise King® Releases Free Guide for Nervous Buyers
- Kanguro Insurance Taps Paylode to Launch Best-in-Class Pet and Renters Insurance Rewards Experience
- CCHR: CIA Mind-Control Files Raise Urgent Questions as Millions Take Psychotropic Drugs
- NRx Pharmaceuticals Launches Breakthrough One-Day Treatment Clinic in Florida as FDA Pathway and Clinical Data Strengthen Growth Outlook; $NRXP
- Revenue Optics Launches Talent Infrastructure Platform for SaaS Revenue Hiring and Appoints Sabz Kaur to Lead Growth
- Building a Multi-Domain Autonomous Systems Platform at the Intersection of AI, Defense and Infrastructure: VisionWave Holdings (N A S D A Q: VWAV)
- Bent Danholm Named "Top Luxury Real Estate Leader" in Modern Luxury Miami
- Author Ken Mora to Celebrate New Caravaggio Book Debut with Special Event at Palazzo Venezia Naples
- Matthew Sisneros Releases Raw and Unfiltered Memoir: The Devil Lost Another One — A Powerful Story of Crime, Consequence, and Redemption
- From Life to Light: Jess L. Martinez Shares a Soulful Poetry Collection That Explores What It Means to Be Human
- Lawsuit Filed Against Boeing Over Defective Seat Switch on Boeing 787
- Quadcode Acquires Significant Stake in Game 7, LLC - The Parent Company for FPFX Tech and PropAccount.com
- LoanCraft Named Fannie Mae Technology Service Provider for Income Calculator
- Danholm Collection Announces Sale of 16689 Broadwater Ave in Winter Garden, Highlighting Strong Performance in Twinwaters Community
- Raven Carbide Dies Shares Best Practices for Maintaining and Extending Carbide Die Life
- The Truth About Dealer vs. Independent European Repair: More Options for Ann Arbor Drivers Than Ever
- Strong Clinical Results for Breakthrough Liver Diagnostic Platform; ENDRA Life Sciences (N A S D A Q: NDRA) $NDRA
- 46th International Symposium On Forecasting – Dates, Venue And Speakers Announced