Supply issues are hurting auto sales in 2022. Now demand is weakening.

The global semiconductor shortage is easing, which could allow automakers to increase production this year. But higher interest rates could keep sales low.

Last year, sales of new cars and trucks fell to their lowest low level in a decade, as automakers could not make enough vehicles for consumers. buy. This year, sales are expected to remain weak, but for an entirely different reason: weakening demand.

Federal Reserve interest rate hikes, aimed at curbing inflation, have made it harder and more expensive for consumers to finance auto purchases, after prices have already hit record highs. buyers to delay buying cars or stay away from showrooms altogether in 2023, even if automakers produce more vehicles than last year because they can get more parts.

"For more than a decade, low interest rates have helped people buy the big cars Americans love," said Jessica Caldwell, executive knowledge manager at Edmunds , a market research company. "Low Fed rates are what made these attractive offers of zero percent financing and 72-month loans possible, but with higher rates, it's a pretty hostile market for car buyers. ."

Edmunds estimates that automakers will sell 14.8 million cars and trucks in the United States this year, which would be well below the sales at which automakers got used to over the previous decade.

Analysts expect the industry to have sold less than 14 million light trucks and cars l last year in the United States once the major automakers announce their deliveries for the year. That would be down over a million from 2021. Prior to the coronavirus pandemic, the industry typically sold over 17 million new vehicles per year.

If the austere estimates are confirmed, last year's sales total will be the lowest since 2011, when the industry had just begun to recover from the financial crisis and sold 12.7 million cars and of new trucks.

"It seems likely that rising interest rates are now limiting demand in the automotive retail market," said Charles Chesbrough , senior economist at market researcher Cox Automotive, in a statement. "With record prices and high loan rates, the pool of potential buyers for new vehicles is shrinking."

Stellantis, the company resulting from the merger of Fiat Chrysler and Peugeot said its U.S. sales fell 13% in 2022. Honda reported a 33% drop and Nissan's sales fell 25%. One of the main reasons was the continued shortage of computer chips, which forced manufacturers to slow down or halt production at times over the past two years and left dealers with few vehicles to sell.

Toyota Motor, the world's largest automaker by number of vehicles sold, said on Wednesday its U.S. sales fell about 10% to 2.1 million vehicles in 2022. But in an indication that the supply of chips and other parts improved towards the end of the year, the company said fourth-quarter sales jumped 13% from last year. last year. percent increase in U.S. sales last year to 2.3 million vehicles, putting it just ahead of Toyota after G.M. fell to second place for the first time in decades in 2021. G.M. said fourth-quarter deliveries rose 41%.

Sales of G.M.'s electric car, the Chevrolet Bolt, rose more than 50% to reach 38,120 for the year. The company also said sales of the GMC Hummer, an electric pickup truck that sells for more than $100,000, rose to 854. The company, which said it aims to eliminate internal combustion engine vehicles from 2035, counts on several new electric vehicles. models to increase sales this year.

Another company that has done relatively well is Hyundai, the South Korean automaker that sells cars under the Hyundai brands and Kia and who also ma. ..