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J.D. Power and LMC Automotive forecast that January-March U.S.
car and light truck sales will decline 18% from a year ago, and
predict the annualized sales pace for March will slump to 12.7
million vehicles, down from 17.8 million a year ago.
Cox Automotive said earlier this week first quarter U.S. auto
sales would be the weakest in a decade.
Tesla Inc could buck the downward trend. The world's most
valuable automaker is expected to report its first quarter
deliveries as soon as Friday, and Wall Street had been expecting
an improvement from the fourth quarter figure of 308,650
vehicles. However, Tesla has had to shut down production at its
Shanghai factory this week to comply with COVID lockdowns.
Two years after the first wave of COVID-19 pandemic lockdowns
derailed the U.S. economy, automakers are still trying to find
their balance. The spike in gasoline prices, propelled by the
war in Ukraine, and the worst inflation in 40 years have rattled
consumer confidence. Rising rates coupled with high pump prices
have often been harbingers of recessions for the auto industry
in the past.
Consumer intentions to buy a new or used vehicle in the next six
months have slumped in March for the second month in a row, and
for used vehicles are at the lowest levels in 15 months,
according to a survey released by the Conference Board this
week.
Shortages of semiconductors and other supply chain bottlenecks
have left U.S. dealers short of many popular vehicles.
At the same time, the job market is strong and demand for new
trucks and sport utility vehicles, as well as electric vehicles,
are so strong that average vehicle prices are still at near
record levels around $47,000, Cox Automotive analysts said this
week.
Automakers earlier this year predicted sales and production
would increase as supply chain bottlenecks eased during the
year. The Ukraine conflict and a surge of COVID cases in China
have some analysts questioning how much improvement automakers
can deliver.
(Reporting By Joe White; Editing by Nick Zieminski)
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