Auto industry research group lowers new car sales forecast by nearly a million vehicles
An auto industry research group has lowered its 2022 new car sales forecast for the second time this year, and it's not because of inflation, high gas prices or the price of new cars.
Cox Automotive dropped its 2022 new car sales forecast by nearly a million cars this time - from 15.3 million to 14.4 million. Cox Senior economist Charlie Chesbrough says automakers are hobbled by chronic parts shortages, especially computer chips.
Chesbrough says in the near term, there's not much car companies can do. In the long term, "A lot of manufacturers are rethinking where they're getting their parts, and I think that's part of the impetus to see a bigger effort to get more domestic production of many parts including silicone chips."
Chesbrough says the war in Ukraine is also affecting the parts shortage, because the country is a big producer of wiring harnesses.
Chesborough says pentup demand remains very strong - but he notes that demand no longer includes many lower income drivers. He says they stopped being able to afford new cars even before the pandemic.
"People who are buying today are people who can afford these vehicles, and can afford to wait to get exactly what they want."
Chesbrough says it's unclear when the chips shortage will ease.