Nov 23 (Reuters) – U.S. new vehicle retail sales are expected to be relatively flat in November as high vehicle prices, coupled with interest rate increase, are moderating demand, a report from industry consultants J.D. Power-LMC Automotive showed on Wednesday.
Consumers who were willing to shell out more money for cars amid a shortage are now pulling back from spending as higher loan payment pressures affordability.
The average monthly finance payment in November is set to be $712, up 7.2% from November 2021, according to the report.
Although, demand, transaction prices and retailer profits continue to show strength on the retail side, these metrics will show signs of either moderation or decline, according to Thomas King, president of the data and analytics division at J.D. Power.
King said he expects the trend observed in November to continue into 2023.
Retail sales of new vehicles this month are expected to reach 933,402 units, a 0.3% decrease from November 2021, the report said.
November seasonally adjusted annualized rate for total new vehicle sales is expected to be 13.9 million units, up from 12.9 million units a year earlier, the report showed.
The report, however, flagged that new-vehicle transaction prices continue to rise but at a slower pace than earlier this year.
Total new vehicle sales in November, including retail and non-retail transactions, are projected to reach 1,102,300 units, a 5.6% increase from November 2021, according to the report.
Globally, vehicle selling rate is expected to increase slightly in November to 86.5 million units but volume growth from November 2021 is expected to be moderate at 8%.
“The potential for new lockdowns in China and a rail strike in the United States add some risk to the outlook for November and December, but inventory is generally improving,” said Jeff Schuster, president, global forecasts at LMC Automotive.