US new car sales are expected to decline in April, as lower inventories and rising interest rates drive up prices amid higher demand, said consultants JD Power and LMC Automotive.
According to a report released by Consultants on Wednesday, retail sales of new cars in the United States could be 1.8 million units in April, down 23.8% from a year earlier.
Demand remains strong, but with less than 900,000 units of inventory at the dealership, sales volume will remain below the level of a year ago, says Thomas King, president of data and analytics at JD Power.
With the COVID-19 lockdown in China and the war in Ukraine, global electronics shortages and supply disruptions have hampered production for more than a year, with supply problems hitting the automotive sector hard.
The average transaction price is expected to reach a record $ 45,232 in April, an increase of 18.7% over the previous year and the second highest level since December last year.
Rising interest rates also threaten the value of current transactions, with the average interest rate on loans in April rising 33 basis points to 4.61% from a year earlier, advisers said.
The seasonally consistent annual rate for total new vehicle sales is expected to be 14.5 million units in April, down from 3.9 million units last year.
Advisors say global forecasts for light vehicle sales are now down to 81.7 million units in 2022, down 900,000 units from the previous month.
Total new vehicle sales for April 2022, including retail and non-retail transactions, are projected to reach 1.2 million units, down 21.5% from the previous year.
(Reporting by Kannaki Deka in Bangalore; Editing by Amy Karen Daniel)