September sales volume to fall to lowest since Great Recession, Cox says

Cox expects September’s sales pace, or seasonally adjusted annual rate (SAAR), to fall to around 12.1 million vehicles, its slowest pace since May 2020, when much of the country shed been closed in the first months of the coronavirus pandemic. This rate is down by around 1 million vehicles compared to August and around 4 million units compared to the sales rate set in September 2020.

September would mark the fifth consecutive month of SAAR decline for light vehicles in the United States. In each of those months, the pace of sales declined by over a million units. Inventories at dealerships have fallen 58% since September 2020, down nearly 1.4 million units, Cox said.

“After a strong spring selling season, the supply situation has suddenly deteriorated and is driving sales down with it,” Charlie Chesbrough, senior economist at Cox Automotive, said in a statement.

No vehicle segment supported sales in September, Cox said. The largest year-over-year declines were recorded in the midsize car segment at 41% and in the compact crossover segment at 33.7%.

Decline in the third trimester

With September sales down, Cox expects third quarter volume to drop 14% from a year earlier and 22% from third quarter 2019.

Consumer demand is strong, but the stocks on the lots of the dealers remained sparse. Lack of choice can push about half of potential buyers of cars outside the market, according to an August poll by Cox’s Kelley Blue Book team.

Cox expects chip supply constraints to improve, resulting in a better sales rate in the fourth quarter.

“But that doesn’t mean good sales rates,” Chesbrough said.

Still, some automakers have managed the shortage better in recent months, he added.

“Automakers are improving their ability to redirect existing chips to the most important vehicles in their portfolio,” Chesbrough said. “This strategy should support better sales in the fourth quarter compared to the third quarter. ”

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