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Thursday, 13 January 2022 23:07

Cox Automotive Makes 10 Predictions for Auto Industry in 2022

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...an EV. In 2022, further strong growth is expected, especially as high-profile EV pickups begin to enter the market. Production of the new Rivian RT1 pickup is underway; the Ford F-150 Lightning is scheduled to be on the road by spring.

 

5: Auto Loan Rates Will Rise

 

Low auto loan interest rates have helped take the sting out of rapidly rising vehicle prices. Unfortunately, the end is near. Inflation is at the highest level since 1982, and the Federal Reserve Bank is ready to address that with expectations for three, quarter-point rate increases in 2022, followed by three in 2023 and two more in 2024.

 

Generally speaking, the Cox Automotive team expects auto loan rates to be higher by the end of 2022. From a historical perspective, rates would still be low and attractive. However, the increase would mean an end to the 2021 financing trend that helped mitigate some of the vehicle price inflation.

 

6: Lease Demand Will Improve in 2022 

 

Lease penetration of the retail market had moved above 30% in 2019 but has been notably lower through the pandemic and below 25% in the second half of 2021, the lowest point since 2013. The Cox Automotive team is forecasting the share of leases will increase as inventory rebuilds and consumers hunt for ways to lower monthly payments.

 

In a recent Cox Automotive survey, 69% of consumers agree that the average price will increase to where new vehicle ownership is out of reach for the average consumer, up from 51% in 2021. Leasing may offer a solution for some, with lower monthly payments. An increase in leasing in 2022 will help the used-vehicle market mid-decade as well.

 

7: The Service Revenue Opportunity Will Continue to Be Robust for Dealers

 

The average vehicle on the road today is more than 12 years old, according to research firm IHS, and the vehicle parc is...


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