Lack of New-Vehicle Inventory Still Constrains Sales Pace as Prices, Profits Reach Record Highs; Incentive Spending at New Low

The Retail Sales Forecast

New-vehicle retail sales for April 2022 are expected to decline when compared with April 2021, according to a joint forecast from J.D. Power and LMC Automotive. Retail sales of new vehicles this month are expected to reach 1,076,200 units, a 23.8% decrease compared with April 2021 when adjusted for selling days. April 2022 has one more selling day compared to April 2021. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 20.9% from 2021.

The Total Sales Forecast

Total new-vehicle sales for April 2022, including retail and non-retail transactions, are projected to reach 1,241,300 units, a 21.5% decrease from April 2021. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 18.5% from 2021.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 14.5 million units, down 3.9 million units from 2021.

Read the full press release for additional details and key takeaways >

What should the insurance industry be focusing on in relation to the April auto forecast? Marty Ellingsworth, Executive Managing Director of Insurance Intelligence at J.D. Power, weighs in:

"The only ones not making a profit right now in auto sales are the consumers and their auto insurance providers. Record costs for everything are moving expected forward-looking loss costs further from the truth, and that is creating very unfavorable loss ratios in auto insurance. The only way to get smarter faster is to use 'price now' data at individual vehicle configuration levels. New ways of using off-the-shelf data with traditional spreadsheets can help.

Expect a ‘bigger pie’ to make agents more profitable while seeing customers seek more value from insurer risk management, safety, and prevention. Matching customer preference to carrier promise keeping is more important than ever."