Going Up: In June, The Average New Car Or Truck Costs Nearly $6,000 More Than A Year Ago

U.S. auto sales are on a pace to be down around 16% in June vs. June 2021, forecasters said. Likewise, U.S. auto sales are down around 20% for the second quarter, and down around 19% for the first half of 2022 vs. a year ago, according to a forecast from J.D. Power and LMC Automotive.

That’s not for lack of demand. Analysts blame the drop in sales on the ongoing shortage of computer chips, which in turn is causing a drop in auto-factory output. Other potential headwinds to auto sales include rising interest rates and the price of gas, but the chip shortage is the biggest problem.

According to AutoForecast Solutions, Chester Springs, Pa., the chip shortage is responsible for cutting North American auto production by at least 2.5 million cars and trucks since January 2021.

Predictably, high demand and low supply are driving new-vehicle pricing to record highs. According to J.D. Power, the average new-vehicle transaction price for June is a record $45,844, up $5,806, or 14.5%, vs. a year ago.

U.S. dealer profits are correspondingly high. Including gross profit on the sale of the vehicle itself, plus additional income from finance & insurance, total retailer profit per new vehicle for June is an estimated $5,123, according to J.D. Power.

That’s an increase of $1,174, or 30%, vs. a year ago, and an unprecedented eight out of the last nine months with the average retailer profit per unit at or above $5,000, J.D. Power said.

Thomas King, president of the data and analytics division at J.D. Power, said in the forecast, which was published on June 24, that June 2022 would be the eighth consecutive month that retail inventory closes below 900,000 units.

For the month of June, J.D. Power and LMC Automotive said they expect sales of about 1.1 million cars and trucks, down 15.8% vs. a year ago. For the second quarter, the forecast predicts sales of about 3.5 million, down 20.5%; for the first half, sales of about 6.8 million, down 18.7%.