Forecast: U.S. Auto Sales to Drop in March and Rest of Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. auto sales could decline in March and full-year 2022 due to rising inflation, ongoing supply-chain issues and now the Russia-Ukraine war, according to a joint forecast from consultants LMC Automotive (LMC) and J.D. Power.

"Sales continue to be held back by supply-chain issues, though we are seeing some erosion of underlying demand as the economic outlook deteriorates. March is expected to suffer from the added effect of the war in Ukraine and an increase in inflationary pressure on consumers worldwide," said Jeff Schuster, president of Americas operations and global vehicle forecasts for LMC.

March sales are expected to reach 1,044,500 units, down 27.8% year over year when adjusted for selling days (March 2022 has one more day compared with 2021).

According to Schuster, existing supply shortages, combined with Russia's invasion of Ukraine, "have created a volatile market, causing [us] to make a substantial downgrade to the 2022 outlook." Sales in full-year 2022 are forecast at 82.6 million units, down 4% from the February forecast for the year. First-quarter sales are projected to be 2.8 million units, a 14.8% decrease year over year.

Ukraine is home to two-thirds of the world's production of neon, a key raw material for the production of semiconductors; its untreated form is imported from Russia. In addition, the countries produce aluminum, nickel, palladium and pig iron, which are also necessary for the automotive industry.

Although the domestic auto sales forecast looks dim, Industrial Info is tracking $18.4 billion worth of projects in the U.S. automotive sector that are under construction. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of detailed project reports.

Click on the image at right for a breakdown by project type of automobile projects under construction in the U.S.

These projects include Toyota Motor Corporation's (NYSE:TM) (Toyota City, Japan) $391 million truck and SUV assembly plant expansion in San Antonio, Texas. The project entails constructing a building addition and adding new manufacturing technologies to increase production capacity at the 270,000-vehicle-per-year plant. Completion is expected in June. The new facility will make San Antonio the company's exclusive producer of its Tundra and Sequoia models, according to the San Antonio Business Journal.

Toyota also is at work on a $400 million grassroot transmission and components manufacturing plant in Cibolo, Texas, outside of San Antonio. The approximately 500,000-square-foot facility is expected to produce automatic and hybrid transmissions, according to the San Antonio Business Journal. Completion is expected later this month. Subscribers can see Industrial Info's reports on the San Antonio and Cibolo projects.

Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.