Here’s one part of the economy that’s gotten steadily worse over recent months, even as much of the rest of the economy’s been improving: motor vehicle sales. Monthly sales totals (on an annualized basis), peaked back in April, and have been falling ever since. Another dip is expected when figures for August are released this week.
Many consumers have cash in the bank, and they’re ready to spend it on a new vehicle. Especially, said Garrett Nelson at CFRA, if it’s big enough to take the family on the road.
“COVID has boosted demand for trucks and SUVs. You know, a lot of it really depends on the delta variant. If we see a pullback in airline travel, I think you’re going to see even stronger demand for trucks and SUVs,” he said.
But the pandemic has disrupted the global supply of computer chips that go into modern vehicles, said David Whiston at Morningstar. And that’s slowed production.
“That’s what’s been so tragic in 2021 for the auto industry is that demand is excellent. There’s just not enough inventory to meet that demand, it’s not even close right now,” he said.
The shortage of models on dealer lots has driven up prices and wait times.
He said, if you don’t want to wait for new wheels to come off the assembly line, shopping “pre-owned” is an option.
But there’s no guarantee you’ll find what you’re looking for and used-vehicle prices have shot up, too.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.