x 156572 152543 143314 138349 119841 139335 135300 0 50,000 100,000 150,000 200,000 2016 2017 2018 2019 2020 2021 2022 Forecast New light vehicle registrations Covering Second Quarter 2022 Volume 22, Number 3 San Diego Auto Outlook Comprehensive information on the San Diego County new vehicle market Market Summary Annual Trend in San Diego County Market Domestics consist of vehicles sold by GM, Ford, Stellantis (excluding Alfa Romeo and FIAT), and Tesla. Data Source: AutoCount data from Experian. The graph above shows annual new retail light vehicle registrations from 2016 thru 2021 and Auto Outlook’s projection for 2022. Historical Data Source: AutoCount data from Experian. YTD '21 YTD '22 % Chg. Mkt. Share June June '21 to '22 YTD '22 TOTAL 75,263 65,040 -13.6% Car 22,951 18,779 -18.2% 28.9% Light Truck 52,312 46,261 -11.6% 71.1% Domestic 21,156 19,832 -6.3% 30.5% European 11,636 10,095 -13.2% 15.5% Japanese 35,563 28,100 -21.0% 43.2% Korean 6,908 7,013 1.5% 10.8% Pent up demand is accumulating. Auto Outlook estimates that 29,200 new vehicle purchases have been postponed since the onset of the pandemic and ensuing vehicle supply shortages. This will provide a boost to sales for an extended period. The labor market is near full employment. As mentioned on the right, recession might be around the corner and new vehicle affordability has weakened, but the unemployment rate is very low and jobs are generally, plentiful. It’s rare for the economy to enter a prolonged downturn when the labor market is as tight as it is now. Household wealth has increased. Household net worth has reached record highs and consumers have greatly increased their holdings of cash and equivalents. This will help households in weathering any prospective economic downturn. Impressive array of new products coming out. The bevy of new models being introduced offering alternative powertrains and advanced technology should lure many new vehicle shoppers into the market. Lean supplies have placed a ceiling on sales levels. The lingering microchip shortage and pandemic-related supply issues continue to be the primary factor impacting the market. Demand will soften in the coming months, but insufficient production is still the main roadblock holding back sales. New vehicle affordability has taken a turn for the worse. Tight inventories have pushed vehicle prices upward, rising fuel prices have cut into disposable income, and higher interest rates are boosting monthly payments. Higher wages have helped, but monthly vehicle loan and lease costs as a percent of disposable income have moved higher during the past several months. Chances of recession have increased. GDP growth declined in the First Quarter of this year and many economists expect a recession as the Fed puts the brakes on the economy to fight inflation. New vehicle sales almost always decline during economic downturns, but lean supplies have already pushed sales to very low levels. It would take a deep recession for sales to decline further. Forecast for County New Retail Light Vehicle Registrations in 2022 Baseline scenario: 135,500 down 2.9% vs. ‘21 Alternative upside: 140,900 up 1.1% vs. ‘21 Alternative downside: 127,600 down 8.4% vs. ‘21 FORECAST Tight Supplies Continue to Dictate Pace of County New Vehicle Sales Key factors boosting new vehicle sales Key factors holding back new vehicle sales Key Trends in San Diego County Market • New retail registrations during the first six months of this year fell 13.6% versus year earlier. Strong results for Tesla prevented a steeper decline. Tesla registrations in San Diego County were up 57.2% so far this year. Excluding Tesla, the market fell by 17.7% in the first half of 2022. • BEV (battery electric vehicle) share was 14.2% in the first half of 2022 (see page 4). 22 San Diego Dealer
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