x 346851 357803 350718 347951 330391 366485 349900 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 2016 2017 2018 2019 2020 2021 2022 Forecast New light vehicle registrations Covering data thru June, 2022 Volume 20, Number 3 Georgia Auto Outlook Comprehensive information on the Georgia new vehicle market TM Market Summary Annual Trend in State 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 203,615 163,839 -19.5% Car 51,207 38,807 -24.2% 23.7% Light Truck 152,408 125,032 -18.0% 76.3% Domestic 81,098 63,288 -22.0% 38.6% European 19,365 16,595 -14.3% 10.1% Japanese 81,057 63,213 -22.0% 38.6% Korean 22,095 20,743 -6.1% 12.7% Pent up demand is accumulating. Auto Outlook estimates that 58,600 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 total employment is increasing. It’s extremely rare for the economy to enter a sharp and 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 Georgia New Retail Light Vehicle Registrations in 2022 Baseline scenario: 349,900 down 4.5% vs. ‘21 Alternative upside: 364,300 down 0.6% vs. ‘21 Alternative downside: 332,000 down 9.4% vs. ‘21 FORECAST Tight Supplies Continue to Dictate Pace of State New Vehicle Sales Key factors boosting new vehicle sales Key factors holding back new vehicle sales Key Trends in State Market • Toyota, Ford, Chevrolet, Nissan, and Honda were market share leaders (see page 3). • BEV (battery electric vehicle) share was 3.9% in the first half of 2022 (see page 4). • New retail registrations in the first half of this year fell 19.5% versus year earlier, but were higher than in ‘20 (see page 5). THE GENERATOR 30
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