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Thus far, a shortage of cars due to supply disruptions, combined
with a preference for personal transport, has seen consumers
willing to shell out more money, largely protecting profits at
automakers and auto dealers who have pulled back on discounts.
But used-car dealer CarMax Inc rang the alarm bells on Thursday,
suggesting consumers were beginning to pull back from big-ticket
purchases due to decades-high inflation.
Analysts now warn demand may lose steam in the coming quarters
as rising interest rates discourage consumers from paying more
money for cars and trucks in the coming months.
"We are paying close attention to how the industry will react to
these concerns. Perhaps there will be more incentives, longer
finance terms, or a combination of these," said TrueCar analyst
Zack Krelle.
More incentives might mean auto margins starting to shrink, as
the industry finally begins to feel the pinch of inflation that
has hurt other consumer sectors.
Third-quarter sales, however, will be more about parts
shortages. Ford Motor Co last month forecast it had about 40,000
to 45,000 vehicles in inventory at the end of the third quarter
without some parts.
GM BEATS TOYOTA AGAIN
General Motors Co is set to outsell Toyota Motor Corp for the
second consecutive quarter on improved inventory levels,
according to industry consultants Edmunds and Cox Automotive.
GM, Ford and Tesla Inc will be among the biggest gainers year
over year in the third quarter, with many Japanese brands -
still struggling with inventory issues - booking the most
significant declines, Cox said.
Edmunds said 3,393,988 new cars and trucks will be sold in the
United States in the third quarter, a 0.9% decrease from a year
earlier.
(Reporting by Aishwarya Nair in Bengaluru; Editing by Maju
Samuel)
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