New-vehicle SAAR projections for 2022 revised to 14.4M units

New-vehicle sales are expected to continue worsening for the rest of the year due to supply constraints that eroded initial hopes of the market improving during the second half of 2022. Cox Automotive has again lowered its sales forecast for 2022, with the seasonal adjusted annualized rate (SAAR) projected to finish the year at 14.4 million units, Charlie Chesbrough, Cox Auto senior economist, said Tuesday during Cox Auto’s mid-year industry review call. Cox Auto initially forecasted the 2022 SAAR to reach 16 million units but lowered that expectation to 15.3 million units in March. “We started the year with high hopes that the market could grow to 16 million units. We expected a weak first half of the year but then a quickly improving second half,” Chesbrough said. “However, by March, we saw little progress on the supply issues. Since then, we've had worsening economic news and no significant improvement to the chip shortage and other supply chain problems.” [caption id="attachment_56409416" align="alignnone" width="2560"] © Can Stock Photo / Vershinin89 [/caption] Deutsche Bank , on the other hand, painted a much more optimistic outlook for full-year SAAR on Monday. The German bank expects sales to “recover sequentially further through the year,” bringing the 2022 SAAR to 15 million units, up from 14.9 million during the same period in 2021, according to a research note. Cox’s latest prediction represents “an optimistic outlook” that relies on supply chain improvement in the back half of this year, Chesbrough noted. In fact, the number of vehicles sold per day, on average, clocked in at 46,200 during the spring months compared with a historical average of about 60,000 per day, according to Cox Auto. “The year started as normal until the chip shortage struck in the spring. Daily sales were immediately reduced , and we have had only a minor recovery since,” Chesbrough said. For June, Cox Auto predicts the new-vehicle SAAR will land at 13.8 million units, up from 12.7 million in May but down from 15.5 million in June 2021 . TrueCar , too, is calling for June’s total light vehicle industry sales SAAR to be 13 million, a 13% year-over-year decrease, according to a forecast today. A joint forecast last week from JD Power and LMC Automotive also called for new-vehicle sales to decline in June to 13.1 million units, down 2.3 million units from the same period in 2021. “So far in 2022, the market remains constrained even though underlying demand for vehicles may be weakening from worsening economic conditions,” Cox Auto’s Chesbrough noted. Auto Finance Summit, the premier industry event for auto lending and leasing , returns October 26-28 at the Wynn Las Vegas. To learn more about the 2022 event and register, visit www.AutoFinanceSummit.com .

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