(Reuters) – U.S. car retail sales will fall in January because of lower production due to Omicron variant and supply chain constraints. This, along with high global demand caused by the Omicron variant. Consultants J.D. Power and LMC Automotive.

According to a Wednesday report by consultants, retail sales of new cars could drop 8.3% to 828.900 units from one year ago.

Thomas King, President of J.D.’s data and analytics division, stated that “the volume of vehicles delivered to dealers in January was insufficient to satisfy strong consumer demand.” Powers.

Supply chain bottlenecks caused by the COVID-19 pandemic have led to higher costs of everything, from labor and raw materials.

New vehicle prices are rising because of consumer demand and less supply. In January, the average retail price for a new vehicle is forecast to be $44,905. The previous month’s high was December 2021 when it reached $45,283.

U.S. Business Activity grew at its lowest pace for 18 months in January because of a winter surge COVID-19-related infections. But, there was still strong demand.

The January 2022 total new vehicle sales, which includes retail and nonretail transactions will be 932,099 units. This is a decrease of 15.6% from the previous year.

The market is at risk due to a variety of drivers who have been disrupting the market over several months. “The addition of geopolitical risks with Russia-Ukraine conflicts is an additional risk to the economy,” stated Jeff Schuster (president, Americas operations, and global vehicle forecasts at LMC Automotive).

According to the seasonally adjusted annualized rate, total new-vehicle sales will be 14.1 Million Units. That’s down by 2.6 Mio units from 2021.

However, the experts expect that global light vehicle sales will increase by 6 to 86.2 Million units in 2022, despite the additional risk.