Americans bought fewer cars in May than in April, and those numbers are likely to decline. That’s why.
The United States is one of the largest automotive markets in the world, second only to China. But while every major global brand is present here, the good times of the past may have begun to fade. This is because sales of new models continue to decline, and figures from May paint a rather bleak picture with no positive outlook.
About 12.8 million new cars were sold in the United States last month, up 11 percent from April. This is evidenced by Wards Intelligence and reports Bloomberg. The same report also emphasizes that productivity in May is the lowest since December. Almost every major brand in the US is facing headwinds. Hyundai Motor, for example, reported Fr. significant drop In sales, almost every one of the 13 models found fewer buyers last month compared to the same month in 2021. Toyota is also facing production challenges and some of its rather successful models for the US market – such as the RAV4, Camry, Tacoma and Highlander – carry the burden. Others, like Kia, Honda, Acura and others, are not much better placed.
The hardships of the recession?
According to The Economist, consumer prices in the US in April were 8.3 percent higher than in the same period in 2021. Consumer inflation is higher than it has been in about four decades. Food and energy prices are rising steadily to the north. And although the recession has not yet come, market observers say consumers are not entirely honest in going out and spending big money.
Even if the recession hits the U.S. economy, it is likely to be mild and may not be earlier than late 2023 or early 2024. But these are still good enough reasons for people to either give up or cancel valuable purchases such as cars, which in any case have seen an increase in prices due to rising resource costs.
Where are the cars?
Even those looking for a new set of wheels and having ready-made financial resources they can afford can find it difficult to create a new addition to the garage. This is because the shortage of semiconductors has been a major challenge around the world, and the waiting time for popular models now crosses more than 12 months in many major markets. Obviously, the US is not insured, and disruptions in supply and production are only reaching a peak.
Thus, even if demand – or at least positive sentiment towards the purchase of new cars – was not affected, production could not keep up.
Date of first publication: June 3, 2022, 9:37 AM IST