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US new car sales will fall in December as high prices deter buyers

US new car sales will fall in December as high prices deter buyers

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Total new vehicle retail sales in the US are expected to fall in December as high vehicle prices and rising borrowing costs prompted consumers to cut spending, a report by industry consultant JD Power-LMC Automotive showed on Wednesday.

“Increasing prices coupled with repeated rate hikes continue to increase monthly loan payments,” said Thomas King, president of data and analytics at JD Power.

According to the report, the average monthly payment for a new car loan in December was $718, up $47 from a year ago.

Retail sales of new vehicles this month are expected to reach over 1.04 million units, down 2.8% year-on-year.

According to the report, total new vehicle sales in December, including retail and non-retail transactions, are expected to top 1.25 million units, up 5.3% year-on-year.

The consultants expect retail sales in the United States to rise next year as inventories improve.

“Even with the likelihood of an economic downturn, pent-up consumer demand over the past two years will keep inventories relatively low,” King said.

Global vehicle sales are expected to end at 80.7 million units this year, down 1% from 2021.

They expect global sales to grow 6% to 85.7 million units through 2023, even as markets grapple with the prospect of an economic recession.

“We anticipate that 2023 will bring a high level of risk and uncertainty as several markets may grapple with recession,” said Jeff Schuster, President, Global Forecasts, LMC Automotive.

(Reporting by Kannaki Deka in Bengaluru; Editing by Dhanya Ann Thoppil)

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