(Reuters) – U.S. car retail sales will fall in December as high demand and shortages have led to prices skyrocketing, analysts J.D. In a Thursday report, Power and LMC Automotive stated that they had received fewer sales than expected.

According to the report, retail sales could decline by 17.7% or 2,923,600 units compared to a previous year.

Thomas King of J.D. Analytics’ data and analytics department stated that “intense demand is driving prices up,” adding, “Prices are going to continue rising because they have a limited supply.” Powers.

Automobile manufacturers of every size are facing the most severe inflationary pressures in 30 years, due to a steady rise in raw material prices.

The average transaction price is expected to be $45,743, which will surpass the $45,000 mark and go 20% above December 2020, when the prices reached the $38,000 level.

After an increase of 10.1% in October, production at auto plants increased by 2.2%. A global shortage in semiconductors meant that November’s motor vehicle production was 5.4% lower than last year.

For December 2021, total sales of new vehicles, both retail and not-retail, is expected to be 1 245,600 units. That’s a 20.5% decline from the previous year.

Jeff Schuster of LMC Automotive, President, Americas Operations and Global Vehicle Forecasts said that “a mild improvement in the shortage in chips may be overshadowed” by the risks posed by the surge in Omicron-variant COVID-19 instances.

In December, the average retail price for a new vehicle is expected to be $45,743, compared with $44,515 in November.

Expected new-vehicle total sales to drop by 3.5million units from 2020, according to the seasonally adjusted annualized rate.

The consultants anticipate that 2022 will see an increase in global light vehicle sales of 86,000,000 units. This is 750,000 more than last month.