Due to the pandemic and other major world events, we are seeing supply chain issues across a variety of industries. The automotive industry is no exception. Car manufacturers have seen shortages in car parts, making it a challenge to create new vehicles. For instance, semiconductor chips are difficult to procure which causes low inventory and price increases. Some wonder if the automotive supply chain will remain strong in 2022 despite the current issues the industry is facing. The good news is that even though challenging times are ahead, the automotive supply chain will continue to thrive.
According to Newsweek, experts predict that prices for new vehicles will rise. The supply chain constraints have caused the rate of vehicle production to decrease. Since fewer automobiles will be made, prices will rise. In spite of the price increases, the demand for buying new cars will still be high.
Used cars will also be more in demand. Not everyone will want to pay high dollar for new cars. It is predicted that the sale of used cars will increase so much that we will see more used cars being shipped across the country. For example, a buyer in Maryland may have a car shipped from across the country by using car shipping companies in California or other US states. This also means that those who are looking to sell used vehicles will have more potential clientele they can reach as they can advertise their vehicles online and factor in the shipping costs as part of the price.
Vehicle customizations will also become more popular. Many consumers will want to take older vehicles and add customizations to fit personal tastes. Demand for repurposing old cars is predicted to grow through 2022 and increase even more through 2023 and 2024.
Trucks and SUVs are also expected to remain the most preferred vehicles for consumers. According to the International Energy Agency, trucks and SUVs will make up over 45% of vehicle sales around the world. SUVs and trucks will continue to increase in popularity because people want what is practical and not necessarily what is cool and flashy. People are considering what is necessary to get themselves and their families from point A to point B, and they desire the vehicles that will get the job done best. Not to mention, SUVs and trucks are deemed to be much safer than smaller cars as trucks and SUVs have the highest safety ratings according to research.
Consumers will be willing to pay more for new cars. Since most people have put their vacation plans on hold due to the pandemic, this means that they have more money to spend on new vehicles. Couple that with the fact that stimulus checks have been issued, there is even more flexibility with car-buying budgets. In March 2021, vehicle sales jumped considerably when stimulus checks were issued for the third time. Marketing experts believe that the increase in sales will continue up through 2022 through 2024.
The sales for electrical vehicles will grow. Since there are global issues that are impacting the price of gas, most notably the war in Ukraine, more consumers will explore electric vehicles as a purchase option. As the sales for electrical vehicles increase, more plans are being put in place to expand charging infrastructure. Once charging infrastructure is more widely available, we will see a major shift away from vehicles that rely on fuel.
Vintage sports cars will be more in demand. Due to the change in the automotive industry in the last two years, marketing experts have seen an increase in vintage sports cars. Collectors are seeing these changes in a positive light, thus are finding more opportunities to sell car models that are considered to be collector’s items. Collectors are also enabling sports cars from 2000 to 2005 to be included as vintage collector items in shows, thus increasing the opportunity for money to be made.
The automotive industry has had to contend with unique supply chain shortages that have certainly made production a challenge. However, we can see that in spite of the difficulties, vehicle manufacturers and sellers have creatively come up with strategies to change gears and ensure success. The outlook for vehicle sales is quite positive for 2022 and beyond, and it is expected that the industry will continue to thrive.