(Reuters) – U.S. car retail sales may fall as increasing inflation hampers customers’ spending, according to consultants J.D. Power and LMC Automotive.

Although supply bottlenecks had been showing some signs of improvement in the last few months, this is unlikely to continue as Russia invades Ukraine and China locks down new Chinese factories following an increase in COVID-19 infection.

Thomas King, President of J.D.’s data and analytics division, stated that “this year with less than 900,000.000 units in stock, it will prove impossible for sales pace to even approach last years level.” Powers.

A report published by consultants Wednesday shows that U.S. retail sales for new cars could decline 27.8% and 1,044,500 units may be sold in March, compared with a year prior.

Global vehicle sales are expected to fall in March due to increased inflation worldwide and the conflict in Ukraine.

According to the report, total U.S. new-vehicle sales are forecasted at 1,188,000.300 units. That’s a 28.9% decline from the previous year.

The U.S. average retail price for new vehicles in March will rise by 17.4% to $43,737. This is a drop from December 2021’s record high of $45,283.

Annualized seasonally adjusted sales for new vehicles are expected to reach 12.7million units. This is a decrease of 5.1 million units over 2021.

Separately, research firm Cox Automotive said https://www.coxautoinc.com/news/february-2022-forecast-u-s-auto-sales earlier this month that there is no indication that inventories will notably improve in March, and that the seasonally adjusted annual rate will drop well below January and February.