The car shopping experts at Edmunds say that the automotive industry faces yet another challenging year marked by inventory shortages amid strong consumer demand, forecasting that 15.2 million new cars will be sold in 2022. Edmunds analysts note that this would represent a 1.2 percent increase from their estimate of 15 million new vehicle sales in 2021.
“2021 marked an unusual year of highs and lows for the industry: Every automaker across the board struggled at the mercy of their suppliers and logistics amid chip and inventory shortages while simultaneously enjoying skyrocketing consumer demand and minimized spending on incentives,” said Jessica Caldwell, Edmunds’ executive director of insights.
“Sales have been depressed since the spring, but consumer appetite for new vehicles continues to run high, which will only serve to build up deferred demand next year and beyond. In 2022 there won’t be a question of how many new vehicles consumers will buy, but how many vehicles automakers can actually produce.”
Beyond inventory shortages, Edmunds experts have put together their list of the biggest industry trends that they predict will shape the road ahead in 2022:
Car shoppers are expected to pay higher prices for more option-rich, higher-trim vehicles than ever before
- Edmunds data reveals that average transaction prices for new vehicles continue to hit record levels, climbing to $45,872 in November 2021 compared to $39,984 in November 2020.
- Edmunds analysts say that consumers are paying above MSRP for new vehicles. In November, the average MSRP was $662 less than average transaction prices on a national level.
- Edmunds experts also note that the vehicles available for sale are richly equipped with more features. Edmunds data reveals that in 2016 the average vehicle cost 30 percent above the starting MSRP; in 2021 that figure is on trend to reach 38 percent.
Leasing penetration will drop to new lows
- Edmunds analysts say that leasing is becoming less popular for a number of reasons: Automakers have less reason to incentivize leasing as inventories remain low, and since many vehicles that are available to purchase are heavily equipped or higher trim levels, they’re less likely to be targeted by automakers for leasing programs as they typically suffer higher depreciation than their mid-to lower-level trim counterparts.
- Edmunds data reveals that lease penetration fell to 23 percent in November 2021, down from 28 percent in November 2019, and Edmunds experts expect the trend to continue.
The EV market will enjoy unprecedented growth in the U.S
- Edmunds analysts estimate that U.S. EV market share will climb to 4 percent (4.6 percent retail) in 2022, eclipsing 600,000 units for the first time.
- A number of new entrants in the EV pickup market will drum up a lot of marketing buzz, but Edmunds experts expect that the Ford F-150 Lightning will be the champion of the segment if it can launch on time and with sufficient quantity.
- Edmunds analysts say that Tesla’s market share is expected to make up less than half of the EV market (46 percent) in 2022 compared to 65 percent in 2021, as new players enter the segment.
Consumers will entertain “build-to-order” as long as inventory challenges remain
- According to a recent Edmunds survey, more than half of consumers said they would be willing to build to order their vehicle, and male respondents were more open to the idea — 59 percent of men responded positively compared with 52 percent of women.
Used vehicle prices will surpass the $30,000 mark for the first time in 2022
- Edmunds experts say that used vehicles will continue to draw more shoppers as inventory shortages squeeze the new vehicle market.
- Analysts note that fewer off-rental and off-lease vehicles will push dealers to lean more heavily on sourcing near-new units from prior customers and trade-ins.
“Consumers who are planning on making a vehicle purchase in 2022 must prepare for a much different market and car shopping experience compared to years past,” said Ivan Drury, Edmunds’ senior manager of insights.
“Competition for new vehicles will be fierce as inventory shortages persist, and serial lessees might need to do some extra planning and research before their lease agreement ends to find affordable options. On a more positive note, EV-curious shoppers will have a number of exciting launches to look forward to in the new year. And for all consumers who currently own a vehicle (and for many customers who currently lease a vehicle), they can expect to capitalize on the value of their trade-in since there’s no indication that used values will fall off a cliff anytime soon.”
About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price, and buy a car with confidence. Regarded as one of America’s best workplaces by Fortune, Great Place to Work and Built-In, Edmunds is based in Santa Monica, California.