As we wrap up a historic year, I’ve put together a review of 2021 and a look ahead to 2022 and beyond:
2021 Industry Review
- Supply chain disruption – What started as a shortage of semiconductors has become an everything shortage, leading to further disruption in automotive production.
- Demand remains high – Consumers continue to have high demand for private mobility, which combined with supply issues, is leading to historically high prices.
- Used recovery – While much of the focus has remained on new vehicles, the story with used is one of a near-full recovery in registrations. Used inventory has also remained more resilient than new.
- Return of inflation – Consumers are battling inflation on many fronts, perhaps most notably in vehicle prices, where new and used levels continue to reach historic highs.
Things to watch in 2022
- Sales before inventory – We’re likely to see new vehicle sales volume recover first as vehicle production picks up, meaning we likely won’t see a recovery in inventory until later in ’22 or potentially even 2023.
- New normal – Even as vehicle production picks up, the good old days of 60 days’ supply and high incentives may not return as OEMs and dealers look to maintain some of the pricing gains they’ve made.
- Room for growth? – With a strong recovery in used sales volumes in 2021, is there much room for growth in 2022?
Things to watch in 2022 and beyond
- Vehicle values – While the acceleration in vehicle prices over the past 18 months has been breathtaking, we’re likely to return to an environment where vehicles depreciate.
- EVs – While still a small component of new vehicle sales today, their influence will likely continue to expand throughout the decade.
- Whither shared mobility? – Consumers strongly shifted away from shared mobility (mass transit, ride-hailing, car-sharing, micro-mobility) to private mobility when COVID arrived; how quickly consumers start to return to shared mobility will determine how strong the private mobility revival will remain.
For more on these topics, download the CarGurus 2021 Review and 2022 Outlook.