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The latest report from California New Car Dealers Association (CNCDA) shows total new light vehicle registrations in 2021 came in just above expectations at 1.86 million vehicles but were still off 11.0% compared to pre-pandemic 2019. The report indicates that sales are expected to continue a gradual recovery, reaching 1.93 million in 2022. These numbers, however, remain subject to uncertainty stemming from the continuing supply chain disruptions and their effect on both imported vehicle deliveries and component shortages affecting domestic production. In part reflecting these continuing shortages, the new vehicle element in the Consumer Price Index rose 12.5% over the year in the latest data for March. As discussed in our previous reports, new vehicle sales are also a major component of sales and use tax that provides revenues for a range of state and local programs.
These factors are also present in the distribution of sales over the year. While pre-pandemic sales generally show only minor variation in 4th quarter sales, especially when compared to the 2nd and 3rd quarters, the 2021 sales saw a strong rise in the 2nd quarter as the state began to recover from the second round of state-ordered shutdowns and bolstered further from pent-up consumer demand, above-average levels of household savings, and continued low levels for household consumption of services. The 4th quarter in 2021, however, saw a sharp fall off of nearly a third from the 2nd quarter numbers in part as the result of supply constraints and rising prices.
To view the full report, click here.
