DETROIT: United States new vehicle sales could fall to the lowest first-quarter volume in the past decade, as chip shortages and the Ukraine crisis squeeze inventories and rising prices push less affluent buyers out of the market, research firm Cox Automotive says.

       US car and light truck sales are expected to fall more than 24% to about 1.22 million units in March and decline more than 16% in the first quarter.

       “Make no mistake, this market is stuck in low gear,” said Charlie Chesbrough, senior economist at Cox Automotive, adding that sales will remain at current levels until supply improves.

       Cox forecasters said the US economy should not experience a recession.

       But Cox cut its forecast for US car and light truck sales in all of 2022 to 15.3 million vehicles, down 700,000 vehicles from its January outlook.

       And even hitting the new target will require significant improvement in supply chain disruptions, Cox said.

       Fresh lockdowns in China as well as Russia’s invasion of Ukraine have reignited supply bottlenecks that were easing over recent months.

       Tight supplies have pushed new vehicle prices to record high levels.

       Detroit’s mainstream brands and Nissan Motor Corp are getting hurt as less affluent consumers leave the new vehicle market, Cox analysts said during a call.

       Households with less than US$75,000 (RM316,650) in annual income now account for nearly two percentage points less of the US light vehicle market than a year ago, Chesbrough said.

       The average income of a new vehicle buyer is now US$124,000 (RM523,530).

       Detroit mainstream brands such as Chevrolet are losing market share, while Cox predicted Japan’s Toyota could be the top selling automaker in the US market for the first quarter.

       “Long-term, you are shrinking the pool of people who are likely to buy” a new vehicle, said Cox chief economist Jonathan Smoke.

       Separately, according to media reports, the automotive industry in the US experienced a sharp drop in demand amid the outbreak of Covid-19.

       In March 2020, US vehicle sales were down 38% year-on-year.

       When stay-at-home orders were released, light vehicle sales bounced back to reach some 14.5 million units. Light vehicles accounted for about 97% of motor vehicles that were sold in the US in 2020.

       New vehicle sales rebounded slightly in 2021 from 2020’s dismal numbers, but were still about two million below the years before the coronavirus pandemic.

       Sales hit just over 15 million vehicles in 2021, up 3.4% from 2020, the year the pandemic took hold in the US. — Reuters