Average price of new cars hits record $ 41,000
Supply constraints and increase demand drove the average price of a new car to $ 41,044 in July, an all-time high, according to the latest US auto forecast from JD Power.
“We cannot reach $ 41,000 without both a supply chain problem that we are seeing from microchips, as well as increased consumer demand that is not being met by the available supply,” said Tyson Jominy, vice president of data and analytics at JD Power. Yahoo finances.
The previous record, set in June, was $ 39,942.
“Too few vehicles in inventory means the pace of sales in July is well below levels seen earlier this year,” Thomas King, JD Power president, Data Analytics, told Yahoo Finance. “Conversely, lack of inventory is pushing vehicle prices to record highs as manufacturers and retailers continue to cut discounts. “
Dealerships are forecast to have about 932,000 new vehicles for sale on lots nationwide by the end of July, up from 3.1 million two years ago.
Goldman Sachs analysts, in a new memo, also pointed out that “an increase in demand driven by stimulus measures and semiconductor shortages that have significantly limited production has led to inventory reduction and a surge new and used car prices “.
“We were flying with demand”
JD Power predicts that the new vehicles sold in July will be around 1,187,300 units. This would represent an increase of 3.7% from July 2020 and a decrease of 8.7% from July 2019.
“I mean, before this month, retail sales were way ahead of 2019,” Jominy said. “In fact, first half sales were up about 12% from 2019 levels. So until the inventory situation caught up, we were flying with demand in the auto industry.”
More than 45% of new vehicles sell within 10 days of arriving at a dealership, with the average number of days a new car sits in the field dropping to an all-time high of 31 days. (Six months ago, that number was 75 days.)
JD Power predicts that total new vehicle sales in 2021 will reach 15 million units, compared to 16.9 million sold in 2019.
An increase in microchips and loosening of supply chain constraints will help automakers increase supply, ease price pressure, and sell more cars, but it may take some time.
“As far as we can see, our forecast is for very similar conditions to persist throughout 21 in fact, until 2022,” Jominy said.
In terms of consumers, Jominy noted that low stocks and high prices “certainly prevent a large part of the population from participating in the new car market, which could have ramifications for many years to come.”
Adam Shapiro is co-host of Yahoo Finance Live from 3 p.m. to 5 p.m. Follow him on Twitter @Ajshaps