For the auto industry, 2021 was yet another challenging year in the wake of COVID-19. Still reeling from the persistent semiconductor shortage, everyone from auto manufacturers to car haulers felt the industry react to production troubles, above average prices, and lower overall sales forecasts.
While industries affected by the pandemic have yet to completely recover, there are encouraging signs on the horizon for the automotive industry in 2022. Fitch Ratings points to pent up demand for vehicles and easing of supply constraints as two major indicators that the industry is bound to continue recovering from its 2020 low points.
With 2021 now having driven off into the sunset, here are some key trend predictions for the global auto industry in 2022:
1. Improved Inventory
In 2021, computer chip shortages continued to hobble automakers’ ability to produce vehicles with key functions, even leading some companies like Nissan to strip intelligent features from vehicles altogether. Fortunately, production bottlenecks are forecasted to be alleviated throughout 2022, with better semiconductor availability giving ground to higher production volume of new vehicles. North American automakers are anticipated to build at least 2 million more vehicles in 2022, finally giving drivers a chance to purchase the car they’ve been waiting a year (or two) for.
2. Lower Used Car Prices
One major consequence of lower new vehicle inventories in 2021 was an increased demand for used cars, resulting in some used vehicles selling at a higher cost than their new equivalent. With production anticipated to return to something closer to a pre-pandemic normal, KPMG anticipates a 20-30% drop in the prices of used vehicles throughout 2022, reaching a normal pricing equilibrium by the fall. Combined with the higher stock of new vehicles, 2022 may be the year that the auto market starts to resemble its former self.
3. More Electric Vehicles
It feels like the electric vehicle future has long been on the horizon, but glimpses of a broad EV future may begin to come into sharper focus in 2022. Pent-up demand for new vehicles, new climate regulations, and the rapid growth of EV technology may culminate in a noticeable uptick in EV vehicle adoption. From SUVs to the already-iconic Tesla Cybertruck, it’s believed that at least 100 different EV models will be on the market come 2022, giving consumers a wide range of electric options to choose from when considering their next vehicle.
4. More Online Vehicle Sales
The internet has largely displaced the business of brick-and-mortar retailers, and in 2022, it’s believed that car dealerships will continue down the same path as other physical stores usurped by online options. A high satisfaction rating with online car purchases combined with an overall decline in car dealerships points to consumers growing more comfortable with making big-ticket purchases entirely online, greatly shifting the means by which the industry moves vehicles.
5. Move Towards Subscription-Based Ownership Models
Cash, auto loans, and leases aren’t the only ways to finance a vehicle purchase — following trends prevalent in the tech industry, automakers have begun offering access to cars through a subscription-based model. In 2022, expect subscription-based pricing models to continue to grow in popularity, providing subscribers access to a choice of different vehicles plus comprehensive roadside services for a fixed monthly fee.
In spite of the disrupted auto market in 2020 and 2021, there’s lots of potential to break bottlenecks and logjams in 2022, giving buyers access to a wide range of vehicles at different prices. And whether it’s a factory-fresh car or a subscription-based electric vehicle, car haulers and shippers may be able to expect a busier and less unpredictable business year come 2022.
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