Parts shortages and high gas prices weigh on the U.S. auto market

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DETROIT, April 1 (Reuters) – Major automakers are expected to report on Friday that first-quarter U.S. car and light truck sales fell sharply from a year ago, with more uncertainty ahead due to parts shortages, high fuel prices and rising interest rates. .

JD Power and LMC Automotive predict that January-March U.S. car and light truck sales will decline 18% from a year ago, and expect the annualized sales pace for March to fall to 12, 7 million vehicles, compared to 17.8 million a year ago.

Cox Automotive said earlier this week that first-quarter U.S. auto sales would be the weakest in a decade. Read more

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Tesla Inc (TSLA.O) may reverse the downward trend. The world’s most valuable automaker is expected to announce first-quarter deliveries as early as Friday, and Wall Street had expected an improvement from the fourth-quarter figure of 308,650 vehicles. However, Tesla had to halt production at its Shanghai factory this week to comply with COVID lockdowns.

Two years after the first wave of lockdowns from the COVID-19 pandemic derailed the US economy, automakers are still trying to find their footing. Soaring gasoline prices, propelled by the war in Ukraine, and the worst inflation in 40 years have shaken consumer confidence. Rising rates coupled with high pump prices have often been harbingers of recessions for the auto industry in the past.

Consumer intentions to buy a new or used vehicle in the next six months fell in March for the second consecutive month, and for used vehicles is at a 15-month low, according to a survey published by the Conference Board this week.

Semiconductor shortages and other supply chain bottlenecks have left U.S. dealers short of many popular vehicles.

At the same time, the labor market is strong and demand for new trucks and sport utility vehicles, as well as electric vehicles, is so strong that average vehicle prices are still at near record highs around $47,000. , Cox Automotive analysts said this week.

Earlier this year, automakers predicted sales and production would increase as supply chain bottlenecks eased over the year. The conflict in Ukraine and a rise in COVID cases in China have some analysts wondering how much automakers can make improvements.

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Reporting by Joe White Editing by Nick Zieminski

Our standards: The Thomson Reuters Trust Principles.

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