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Cox Automotive said it expects tight inventory and high prices will cause new and used car sales in September to fall for the fifth month in a row.
The analytics company said Monday it expects sales of new cars and light trucks to fall to one of the lowest levels in the past decade. It forecast dealers will sell one million new vehicles in September, which will be 8% lower than in August and 26% lower than in September 2020.
The seasonally adjusted annual rate of sales will be 12.1 million vehicles in September, down from August's 13.1 million and 16.3 million in September 2020.
Third-quarter new vehicle sales were forecast to be down 14% from a year earlier and down 22% from 2019's third quarter.
A report issued Tuesday showed Cox Automotive also expects used car sales will fall this month compared to September 2019. Used car sales volume and SAAR hit a peak in March, but have declined each consecutive month, including a sharp drop in August.
Cox Automotive Senior Economist Charlie Chesbrough said the sales pace for new cars has fallen every month since reaching a peak of 18.3 million in April.
"After a strong spring selling season, the supply situation has worsened precipitously and is dragging sales down with it. The monthly declines have been large — the sales pace has declined by more than a million units in each of the past five months. Available supply on dealer lots is now 58% lower than last September, down nearly 1.4 million units."
Cox Automotive's report said the new-vehicle supply shortage has led manufacturers to cut back significantly on incentives, which has resulted in higher prices.
Many frustrated would-be new car buyers are visiting used car lots, pushing up wholesale and retail prices.
The shortage of micro-chips has crimped auto production this year just as consumers were gearing up to buy. They have the money, but high prices are leading many to delay replacing their cars.
A Cox Automotive survey reported Sept. 22 that 48% of those on the hunt for a new car said they are "extremely likely" or "very likely" to delay their purchase due to the chip shortage. Among these postponers, 80% said they are willing to wait three months or longer to buy, up from 71% in a similar survey in April.
However, Chesbrough said he expects inventories to improve in the coming months enough to raise SAARs above September's floor for the rest of the year — "but that doesn't mean good selling rates."
Chesbrough said manufacturers have been able to improve their supplies, and manage them better.
"For example, automakers are improving their ability to redirect existing chips to the most important vehicles in their portfolios," he said. "This strategy should support better sales in the fourth quarter compared to the third quarter."
On Thursday, Cox Automotive economists will present their revised 2020 forecast and their views on factors influencing the market during a conference call that begins 10 a.m. ET.
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