Friday, March 1, 2024
spot_img
HomeNewsCaribbean NewsAverage new-vehicle price sets another record: Interest rates push monthly loan payments...

Average new-vehicle price sets another record: Interest rates push monthly loan payments to all-time high: Part 2

      • The average new-vehicle retail transaction price in May is expected to reach $44,832. The previous high for any month—$45,247—was set in December 2021.
      • Average incentive spending per unit in May is expected to reach $965, down from $2,726 in May 2021. Spending as a percentage of the average MSRP is expected to fall to a record low of 2.1%, down 4.4 percentage points from May 2021.
      • Average incentive spending per unit on trucks/SUVs in May is expected to be $991, down $1,702 from a year ago, while the average spending on cars is expected to be $874, down $1,956 from a year ago.
      • Buyers are on pace to spend $45.4 billion on new vehicles, down $8.3 billion from May 2021.
      • Truck/SUVs are on pace to account for 77.2% of new-vehicle retail sales in May.
      • Fleet sales are expected to total 174,400 units in May, up 3.8% from May 2021 on a selling day adjusted basis. Fleet volume is expected to account for 15% of total light-vehicle sales, up from 12% a year ago.

By J.D.Power

Observations on the used vehicle market

Jonathan Banks, vice president, valuations services, said:

“Used-vehicle prices are booming in May as the industry continues working through ongoing new-vehicle inventory challenges. Wholesale prices are expected to rise 1.6 percent, marking the third strongest performance of the month of May in the past 20 years. May will be the third consecutive month in which wholesale prices increase, placing them 37.2 percent higher year-to-date than a year ago. On the retail side of the market, used prices remain near April 2022’s all-time high, while used vehicles continue to fly off dealer lots at a rapid pace.

“Used retail prices are averaging more than $31,000 per unit, a figure approximately 14 percent higher than May 2021, while days to turn fell to a skeletal 39 days. May’s wholesale and used retail results reinforce the importance of used-vehicle operations as dealers and consumers alike continue leaning on this sector of the market to help fulfil replacement vehicle demand.”

Global sales outlook

Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive, said:

“Global light-vehicle sales were volatile in April as volume fell a staggering 24 percent year over year – the steepest decline so far in 2022. The selling rate plunged to 67.5 million units, which is more than 20 million units lower than the rate in April 2021. A 45 percent pullback in China led the sales decline, but most major markets remain supply-constrained, which contributes to the ongoing weakness in demand. Lockdowns in China, as well as the war in Ukraine, only exacerbate these issues and apply additional downward pressure to global sales activity.

“Early indicators in May suggest declines are expected to continue. We forecast global sales to be off 15 percent in May, though down-side risk remains high in the near term. While the selling rate is expected to improve to 72 million units, it is still more than 10 million units below the rate in May 2021.

“The outlook for sales remains severely constrained, triggering another round of cuts to the 2022 forecast. We expect 2022 to end at just 80.0 million units, a decline of 2 percent from 2021. Most of the cut is focused on the ongoing war-related risk in Europe and fallout from the lockdowns in China. Simply put, there is not enough supply of sellable vehicles to support demand, and that issue is not expected to improve enough through the rest of the year to overcome the new risks. As recovery is pushed out even further and consumers feel more of the effect of rising prices, lack of demand may become the issue once supply can catch up after 2023.”

Related: Part 1

spot_img
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

spot_img
spot_img
spot_img

Caribbean News

Benin joins Haiti’s multinational support force

By Caribbean News Global NEW YORK / HAITI - Turning to the situation in gang-ravaged Haiti, the UN Spokesperson said Benin is the latest...

Global News

UNCTAD to mark 60th anniversary with Global Leaders Forum

The Forum, “Charting a new development course in a changing world”, will unite leaders from across countries and industries to catalyze a new...