Photo: ACEA
The automotive industry has faced some serious challenges over the last two years. After barely recovering from a global pandemic and an industry-wide chip shortage, the industry is facing another hurdle after the onset of the Ukraine-Russia war. Industry consultants in the U.S. are now warning car sales in the country could take a nosedive.
It's not a secret that the Ukraine-Russia war is harming the global economy. The automotive industry is struggling with supply shortages and limited inventories. In February, the auto retail prices were already showing poor signs, with Toyota and Honda recording sales drops of 11% and 21%, respectively.
According to J.D Powers and LMC Automotive, rising inflation in the U.S. could affect consumer spending on automobiles in March, Reuters reported.
At the beginning of the year, industry insiders were hopeful supply chain bottlenecks would ease, but the steady progress hit a dead-end after Russia invaded Ukraine.
Last month, U.S inflation hit a 40-year high on rising food, housing, and gasoline, with the rates set to accelerate following the Russia-Ukraine war. Bloomberg reported that the consumer price index had risen to 7.9% from a year earlier.
Thomas King, President of the data and analytics division at J.D Powers said it will be impossible for the industry to hit last year's sales levels with fewer than 900,000 units in inventory. The retail of new automobiles in the U.S. could fall by 27.8% to 1,044,500 units in March.
The overall global sales of vehicles will also take a dip due to added effects of the Ukraine crisis and inflation pressure on consumers worldwide.
The used-car market is also affected. With supply bottlenecks affecting manufacturers, more and more people are holding onto their older vehicles. As a result, car dealers are charging a premium price for used cars.
With the supply still lagging behind demand, the U.S average retail price for a new car could rise by 17.4% to $43,737.
According to J.D Powers and LMC Automotive, rising inflation in the U.S. could affect consumer spending on automobiles in March, Reuters reported.
At the beginning of the year, industry insiders were hopeful supply chain bottlenecks would ease, but the steady progress hit a dead-end after Russia invaded Ukraine.
Last month, U.S inflation hit a 40-year high on rising food, housing, and gasoline, with the rates set to accelerate following the Russia-Ukraine war. Bloomberg reported that the consumer price index had risen to 7.9% from a year earlier.
Thomas King, President of the data and analytics division at J.D Powers said it will be impossible for the industry to hit last year's sales levels with fewer than 900,000 units in inventory. The retail of new automobiles in the U.S. could fall by 27.8% to 1,044,500 units in March.
The overall global sales of vehicles will also take a dip due to added effects of the Ukraine crisis and inflation pressure on consumers worldwide.
The used-car market is also affected. With supply bottlenecks affecting manufacturers, more and more people are holding onto their older vehicles. As a result, car dealers are charging a premium price for used cars.
With the supply still lagging behind demand, the U.S average retail price for a new car could rise by 17.4% to $43,737.
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