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April 29, 2022 by Adam Malik
In the short term, new vehicle sales will be negatively impacted by supply chain constraints and semi-conductor shortages. Longer-term, however, as these issues ease, numbers will go up despite some barriers, according to a new report.
Retail sales of new motor vehicles in the U.S. are forecast to increase 3.2 per cent annually in unit terms through 2025, predicted The Freedonia Group in its report Motor Vehicles: United States.
Interest rates that are expected to remain low, easing supply chain constraints, increased personal income and a growing population were all considered factors to support new vehicle sales.
But there will be limitations. The report highlighted the following issues that will keep growth in check:
Short-term sales growth will be supported by a release of pent-up demand as consumers delayed purchases due to the COVID-19 pandemic. That, however, will be reliant on product availability. And if there continues to be a significant shortage, prices will increase and prevent faster sales growth, the report noted.
How new vehicles sales are predicted to trend
In the short term, new vehicle sales will be negatively impacted by supply chain constraints and semi-conductor shortages. Longer-term, however, as these issues ease, numbers will go up despite some barriers, according to a new report.
Retail sales of new motor vehicles in the U.S. are forecast to increase 3.2 per cent annually in unit terms through 2025, predicted The Freedonia Group in its report Motor Vehicles: United States.
Interest rates that are expected to remain low, easing supply chain constraints, increased personal income and a growing population were all considered factors to support new vehicle sales.
But there will be limitations. The report highlighted the following issues that will keep growth in check:
- The ongoing retirement of baby boomers
- The later acquisition of drivers’ licenses among young people
- Urban populations growing faster than the general population, expanding the size of a cohort with easy access to public transport and ridesharing services
- Increasing reliability of vehicles
Short-term sales growth will be supported by a release of pent-up demand as consumers delayed purchases due to the COVID-19 pandemic. That, however, will be reliant on product availability. And if there continues to be a significant shortage, prices will increase and prevent faster sales growth, the report noted.