When will the supply of new cars bounce back? Not in July, or in 2022, either

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Mainly due to low availability of new cars and trucks, US auto sales in July are down about 6% from the same month a year ago.

With little reason to hope for a significant improvement in new vehicle deliveries this year, industry experts are already talking about next year or even the year after, before inventory catches up with demand enough to bring new vehicle prices back to Earth. to let it come.

“We’re selling everything we have,” David Hult, president and CEO of Asbury Automotive Group, Duluth, Georgia, said in a conference call this week to announce its second quarter results.

According to a joint forecast by JD Power and LMC Automotive, July will be the ninth straight month that retail inventory of new vehicles falls below the total of 900,000 cars and trucks. The forecast predicts July auto sales of about 1.2 million units, down 5.7% from a year ago. That includes sales for daily rental, corporate and government fleets.

Cox Automotive has a similar but slightly lower forecast for July auto sales, rounding out at 1.1 million. Atlanta-based Cox Automotive cites “headwinds to recovery” in its forecast, such as rising interest rates, higher gas prices and lower consumer confidence.

While these are obvious potential threats, forecasters for both Cox and JD Power-LMC agree that tight supply is the biggest problem depressing auto sales, with no near-term relief in sight.

Analysts blame the shortage of new vehicles on a shortage of computer chips, but the ongoing COVID-19 pandemic is a cause of the chip shortage, as well as other bottlenecks in the supply chain.

How low is 900,000 units anyway? To put the inventory shortage in context, pre-pandemic inventory of new vehicles averaged about 3.5 million in 2019, according to Cox Automotive.

“We continue to experience solid demand across all our revenue streams, but we do not expect a meaningful recovery from new inventory levels in 2022,” Asbury’s Hult said in the conference call.