This April 27th story has been rewritten to correctly spell J.D. In paragraph 3, power

(Reuters) – U.S. vehicle sales are likely to drop in April as rising interest rates and low inventories cause high prices, according to J.D. Power and LMC Automotive.

A report published Wednesday by the consultants shows that U.S. retail sales for new cars could decline 23.8% to 1 million units in April, compared with a year prior.

Although demand remains high, there are less than 900,000.000 units available at dealers, which means sales volume will remain below the year-ago level, according to Thomas King, president, J.D.’s data and analytics division. Power.

Supply issues have been a major problem for the automotive industry. Production was hampered more than one year due to a shortage of electronic parts and bottlenecks caused by COVID-19 lockdowns in China, and war in Ukraine.

Cox Automotive Research also projects April sales volume falling 1.7% from March because of tight inventories. It adds that it is unlikely conditions will improve in 2022.

Charlie Chesbrough (Cox Automotive Senior Economist) stated that although we anticipate production volumes increasing in the second quarter of the year but not enough to allow dealers inventory to build in any significant way, he said in a statement. https://www.coxautoinc.com/news/cox-automotive-us-auto-sales-forecast-april-2022

The consultants stated that rising interest rates pose an additional threat to the current transaction price. In April, the average loan interest rate will rise 33 basis points to 4.61%. This is compared to the 4.61% in April last year.

In addition, they noted that the worldwide forecast for light vehicles sales is down to 81.7million units by 2022. This represents a decrease of 900,000.

For April 2022 total sales of new vehicles, both retail and not-retail, is expected to fall by 21.5% compared with last year.