According to an industry report released on Wednesday, new vehicle prices in the United States are expected to hit a record high in August due to strong demand despite rising interest rates.
According to a report from automotive industry consultants J.D. Power and LMC Automotive, average transaction prices are expected to hit a record $46,259, an increase of 11.5% from a year ago.
New vehicle sales are nevertheless still constrained by a supply shortage. According to the consultants, retail sales of new cars are anticipated to fall 2.6% from a year ago to 980,400 units in August.
The most recent forecast shows that the auto industry, which benefited from consumers’ preference for personal transportation during the pandemic, has not yet been significantly impacted by the U.S. Federal Reserve’s rapid pace of interest rate hikes to control inflation.
“The restrictions are anticipated to persist in September, with sales being hampered by inventory. Prices and per-unit profitability are expected to remain high in the near future “said Thomas King, head of J.D. Power’s data and analytics division.
Due to the limited supply of EVs, the consultants do not anticipate that provisions from the Inflation Reduction Act for a tax credit boost will “materially influence” EV sales volume in the near future.
According to the report, the seasonally adjusted annualized rate (SAAR) for all new vehicle sales in August is predicted to be 13.3 million units, an increase of 0.2 million units from 2021.
In addition, J.D. Power and LMC Automotive increased their forecast for 2022 global light-vehicle sales by nearly 1 million units to 81.8 million as a result of a rebounding China market, which is anticipated to see an 8% increase in sales over the previous year.
