November Auto Sales: Dealers Can’t Sell What The Factories Can’t Make

U.S. dealers are selling new cars and trucks just as fast as the factories can make them. Presumably, dealers could sell a lot more, if they had more to sell, since buyers are snapping up what’s available at record-high prices.

But the ongoing shortage of new cars and trucks — largely due to a computer chip shortage — is expected to drag down U.S. auto sales in November for the fourth month in a row, and continue to drive those sky-high prices, forecasters said.

By the numbers, TrueCar Inc. reported it expects monthly auto sales of fewer than 1.1 million cars and trucks in November. That’s down 15% vs. November 2020.

Analysts for J.D. Power and LMC Automotive came up with a similar auto sales forecast on Nov. 24, which also said the average transaction price for November was an estimated $44,043, a record for the month of November, and the sixth month in a row higher than $40,000.

Both forecasts blame low inventory for the November sales drop and the high prices, since consumer demand remains high.

Analysts said the inventory of available new cars and trucks combined was below 1 million in November, the fourth month in a row below 1 million. Under the circumstances, manufacturers have reduced factory discounts.

“Incentives are still coming down. Prices are still going up. I wouldn’t say there’s balance,” between supply and demand, said Nick Woolard, lead industry analyst at TrueCar, in a phone interview Nov. 23, the same day TrueCar issued its November auto sales forecast.

Woolard said there are some signs that the inventory shortage may have quit getting worse for some brands, and some new models. But on average, rebuilding inventory is going to be a slow process, he said.

“Everyone is looking for signs things are recovering,” in terms of inventory availability, Woolard said. “We’re seeing enough signs, with enough duration, to think the worst may be behind us.”