That’s three months in a row sales have fallen below the year-ago month, and the sixth month in a row the seasonally adjusted annual sales rate has fallen, forecasters said. Most automakers in the U.S. market report October sales on Nov. 2.
For consumers, the shortage combined with high demand spells higher car prices, waiting lists for many popular models, and often, the need to compromise on features and options, in order to get something close to their first choice, analysts said.
U.S. car and truck sales combined are on pace to fall to about 1.1 million units in October, based on dealership results through the first three quarters of the month, according to a joint forecast from J.D. Power and LMC Automotive, published on Oct. 27.
That would be a decline of 17.2% vs. October 2020, and also down about 19% vs. October 2019, pre-COVID, the forecast said.
Separately, Cox Automotive issued an even lower October auto sales forecast, of only 950,000 units. That would be the lowest October auto sales since 2010, when auto sales were still recovering from the Great Recession.
Earlier this month, the National Automobile Dealers Association lowered its full-year 2021 U.S. auto sales forecast to 15.2 million, down from 16.5 million.
Lack of inventory is the biggest issue. By the end of October, forecasters for J.D. Power and LMC Automotive expect the inventory of vehicles on dealer lots to remain below 1 million units, or less than one month’s worth of sales, for the third consecutive month. Historically, the benchmark for new-vehicle inventory is the equivalent of 60 days’ worth of sales.
The shortage means cars and trucks are selling fast. In October, the average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to a record low of 20 days. That’s down from 49 days a year ago, and down from 23 days in September 2021, forecasters for J.D. Power and LMC said.
In a separate conference call on Oct. 27 to discuss third-quarter earnings, General Motors reported its U.S. dealers had just 129,000 cars and trucks in inventory as of Sept. 30, vs. 492,000 a year ago.
GM CFO Paul Jacobson said the company doesn’t expect a return to what it considers desirable inventory levels any time soon, but GM does expect fourth-quarter sales to increase compared with the third quarter.
For example, he said GM expects in the fourth quarter to be able to finish selling off stocks of “work-in-progress” vehicles that were nearly completed earlier and set aside, for lack of computer chips.
“What I would say is that the inventory levels that we’ve seen now, around that 125,000, is expected to remain low, probably into and through 2022, to be honest,” he said.