![]() New vehicle inventories remain near record lows. There are now reports of 2023 model-year production runs having already been sold out, such as for the Ford Maverik hybrid pickup. And there are long waiting lists now for those. And demand has shifted some toward fuel efficient vehicles. There are long waiting lists for various models that people have ordered because there were none in stock. There hasn’t been enough supply to meet demand since spring 2021. Estimating the piggybank of unmet demand. The troughs before 2021 were related to plunges in demand: the Double Dip Recession in the early 1980s the 1990-1991 recession and the Financial Crisis when GM, Chrysler, and a big part of the component makers filed for bankruptcy.īut in 2021 and forward, the trough was caused by supply shortages – not a drop in demand. Over the past four decades, the industry has been stuck essentially in stagnation interrupted by huge declines and recoveries. And at 3.48 million vehicles, sales were right back where they’d been in the 1970s. Compared to Q3 2016, sales were down by 22%. But sales had also been declining in the years before the pandemic. Compared to three years ago, quarterly declines have been in the 17% to 25% range for the past five quarters in a row. ![]() So, compared to Q3 2019, new vehicle sales plunged by 19%. And supply chains, which are long and complex and go all over the globe, cannot react fast enough for sudden shifts in buying patterns. The chip shortages, though improving, continue to dog the industry.īut now there’s this additional wrinkle, triggered by the spike fuel prices: A shift from full-sized trucks and SUVs to vehicles with better fuel economy and to EVs. But last year’s Q3 had been terrible: It was the quarter when dealers had run out of inventory because automakers had been cutting production for months because they couldn’t get the components needed to assemble their vehicles, because component makers had gotten hit by the chip shortages starting in late 2020 and early 2021. Sales of new cars and trucks in the third quarter, at 3.48 million new vehicles, was up about 2.8% from Q3 last year, according to data from the Bureau of Economic Analysis. Very different from prior recessions when the industry was caught with huge inventories and large production runs.
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