ATLANTA – March U.S. auto sales, when reported on Friday, will show a notable drop from last March as the market remains significantly constrained by lack of supply. Despite market conditions that would support healthy demand, the seasonally adjusted annual rate (SAAR) of sales this month is forecast by Cox Automotive to finish near 13.1 million, down from February’s 14.1 pace and significantly down from last March’s 17.6 million level.
Sales volume is forecast to decrease 24% from last March, falling to 1.22 million units. March sales volume will result in Q1 2022 sales being down substantially from last year. Cox Automotive estimates quarterly sales will decline more than 16% from Q1 2021 when 3.9 million units were sold; Q1 2022 is forecast to end with 3.3 million sales and mark the second-worst quarter for new-vehicle sales in a decade, behind only Q2 2020, the height of the global COVID-19 pandemic.
The spring selling season traditionally ramps up in March. This year, the month has 27 selling days, one more than last year and three more than last month. The extra days are a key reason March sales volume will show a more than 15% gain over February. Sales volume has been averaging just over 1.06 million each month since last August.
“Make no mistake, this market is stuck in low gear,” said Cox Automotive Senior Economist Charlie Chesbrough. “March sales volume will tick up from February, but this is not due to a substantial change in the market. Low unemployment, relatively low interest rates—the conditions are right for higher sales. With three additional sales days, volume in March will rise month over month. However, seasonal adjustments reveal the true story: Sales remain weak and will basically be stuck at the current level until more supply arrives.”
COX AUTOMOTIVE FULL-YEAR SALES FORECAST ADJUSTED TO REFLECT MARKET INSTABILITY
The ongoing chip shortage showing little improvement, coupled with the recent news from Ukraine and ongoing inflation issues, has led Cox Automotive to reduce its full-year new-vehicle sales forecast for the U.S. Cox Automotive now expects light-vehicle sales to reach 15.3 million this year, down 700,000 units from the original forecast released in January. To reach this level by year’s end, the supply situation must begin to show significant gains next quarter and consistent improvement throughout the year, otherwise, another forecast adjustment may be necessary.