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New Vehicle Sales Expected to Lift Slightly in Q2 but Remain Down Year Over Year

Analysts say inventory shortages driven by global supply chain issues continue to place pressure on the automotive industry, with no relief in sight

A new report forecasts that 3,498,769 new cars and trucks will be sold in the U.S. in the second quarter of 2022, which will be a 20.8% decrease from the second quarter of 2021 but a 5.1% increase compared to the first quarter of 2022. According to Edmunds data, the second quarter historically is a stronger selling period compared to the first quarter for new vehicles: Q2 sales were approximately 10% higher on average compared to Q1 between 2017 to 2019. Edmunds analysts note that this year’s softer quarter-over-quarter increase is an indicator of how the automotive market is being squeezed.

“Elevated gas prices and rising interest rates only intensified the struggles faced by car shoppers amid ongoing inventory shortages in the second quarter,” said Jessica Caldwell, Edmunds’ executive director of insights. “The majority of consumers who are purchasing vehicles in these conditions are either in a financial position where money is less of a consideration or are doing so out of absolute necessity.”

Edmunds analysts expect supply challenges to stick around for the foreseeable future, and they advise car shoppers to temper their expectations for car shopping deals through the Fourth of July weekend and the rest of the year.

“Although most people are used to the end-of-summer and end-of-model-year sales events, automakers and dealers likely won’t be rolling out the barbecue grills or wacky waving tube men to promote discounts this year because they won’t have a surplus of inventory to clear. Consumers in this market should be determining when they actually need to buy a car instead of holding out for big sales events,” said Caldwell. “Looking ahead, a recovery in vehicle production in 2022 seems highly unlikely at this point, but a bright spot for the industry is that profit margins are staying high and pent-up consumer demand will only continue to build as shortages continue.”

SALES VOLUME FORECAST, BY MANUFACTURER               

SALES VOLUME2022 Q2 Forecast2021 Q2 Sales2022 Q1 SalesChange from 2021 Q2Change from 2022 Q1
GM571,068688,638519,924-17.1 %9.8 %
Toyota539,693688,813516,373-21.6 %4.5 %
Ford490,818475,334432,1333.3 %13.6 %
Stellantis428,402487,241409,844-12.1 %4.5 %
Hyundai/Kia373,085470,594323,220-20.7 %15.4 %
Honda248,741486,419266,419-48.9 %-6.6 %
Nissan188,301298,148201,081-36.8 %-6.4 %
VW/Audi115,340190,419101,537-39.4 %13.6 %
Industry3,498,7694,419,8033,328,817-20.8 %5.1 %

MARKET SHARE FORECAST, BY MANUFACTURER

Market Share2022 Q2 Forecast2021 Q2 Sales2022 Q1 SalesChange from 2021 Q2Change from 2022 Q1
GM16.3 %15.6 %15.6 %4.8 %4.5 %
Toyota15.4 %15.6 %15.5 %-1.0 %-0.6 %
Ford14.0 %10.8 %13.0 %30.4 %8.1 %
Stellantis12.2 %11.0 %12.3 %11.1 %-0.5 %
Hyundai/Kia10.7 %10.6 %9.7 %0.1 %9.8 %
Honda7.1 %11.0 %8.0 %-35.4 %-11.2 %
Nissan5.4 %6.7 %6.0 %-20.2 %-10.9 %
VW/Audi3.3 %4.3 %3.1 %-23.5 %8.1 %

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Carl Fox

Carl Fox is the senior money and finance writer for Conservative Daily News. Follow him in the "Money & The Economy" section at CDN and see his posts on the "Junior Economists" Facebook page.

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