The year 2021 has been a year most consumers would rather forget due to soaring prices. Car buying, in general, has been choppy for both the used and new vehicle markets. With low inventory, it was hard to get a good deal. So how have car sales evolved since the start of the pandemic? Let's take a look and see how the coronavirus (COVID-19) has affected the automotive industry and where we might see things going this year.
Evolution of car sales since the pandemic
The pandemic has dramatically slowed vehicle assembly for automakers, including parts production. The biggest hurdle was the shortage of chips, which put many car models on hold waiting for supplies to arrive. Some models weren't even produced because automakers prioritized which ones they would focus on with the inventory of parts they had.
Most brands have spent the rest of 2020 and 2021 trying to catch up with their vehicles. In fact, according to NBC News, around $210 billion in sales were lost in 2021 alone. Chip shortages, however, have rebounded and started to return to normal, but sadly that's still a long way off. Other products were also affected, including tires, seat foam materials and plastic interior parts.
Predictions of car buying trends in 2022
Experts predict that shortages will continue up to a certain point and that production will be affected by the lack of parts until 2022, possibly until 2023. This is not good news for sales of cars, as it is estimated that 8 million fewer vehicles were produced last year than was projected. If shortages persist, we won't see many new cars rolling off the production line this year either.
Online shopping has increased since the start of the pandemic. Consumers were unable to visit dealerships to try or view cars due to shutdowns in some areas. Additionally, some potential owners were simply concerned about staying healthy and didn't want to go outside until the number of cases was better under control. So, dealerships decided to bring the car buying process to potential buyers.
This happened through dealer websites. Buyers could review vehicles, schedule test drives and begin the application process, all online, without having to travel. Dealerships would simply bring the car to the consumer. Selling online certainly has its advantages.
Sales of electric vehicles are expected to increase this year. In 2021, battery electric cars have doubled in popularity. This year will likely do the same, especially as Joe Biden calls for electric vehicle purchases to account for at least 50% of auto sales by 2030.
Where will car sales take us in 2022?
It seems likely that we might see Level 3 self-driving technology soon. General Motors (GM) is set to ship hands-free versions of some of its models. Mercedes-Benz is also set to roll out its version as well. Waymo and Cruise have been busy developing a ride-sharing program with automated vehicles and freight vehicles.
On a darker note, however, some startups deemed promising may die out this year, according to NBC News. Lordstown Motors, Byton and Faraday Future were struggling auto companies last year, so it will come as no surprise if each ends up falling by the end of 2022. Bollinger has already canceled its all-electric consumer models and is changing its focus on utility vehicles.
While shortages are expected to continue, 2022 still looks to be an exciting year for car sales. Hopefully we'll see more vehicles rolling off the production lines complete and ready for buyers by the end of the year, so new car prices can start to come down.