Automobiles are displayed for sale at a car dealership in Carlsbad, California, U.S., May 2, 2016. REUTERS/Mike Blake/File Photo

July 27 (Reuters) – A shortage of vehicles at dealerships due to automakers’ supply chain struggles is expected to lower U.S. auto retail sales in July, consultants JD Power and LMC Automotive.

Total new-vehicle sales, including retail and non-retail transactions, this month are expected to fall 5.7% from a year earlier after adjusting for the total number of days on sale, the officials said. consultants in a report Wednesday.

Automakers have grappled with supply chain disruptions caused by the COVID-19 pandemic, including those stemming from recent lockdowns in China, with Russia’s invasion of Ukraine compounding the problem.

The industry also has to compete with other manufacturers such as consumer electronics manufacturers for limited supplies of semiconductors.

“In August, the overall pace of industry sales will continue to be constrained by supply, production and distribution issues,” said Thomas King, president of data and analytics division at JD. Power.

But the shortfall in supply, coupled with strong demand, has resulted in record transaction prices and dealer profitability, consultants said.

New vehicle prices in the United States likely remained near record highs in July, with the average transaction price expected to rise 12.3% to $45,869, they said.

The seasonally adjusted annual rate of total new vehicle sales in the country is expected to be 13.7 million units, down 0.9 million units from a year ago.

The consultants also expect global auto sales volume in 2022 to decline 0.8 percent from a year earlier to 80.8 million units.

“While there is near-term upside potential in China, we believe volume will decline as inventories tighten given the strength of demand,” they said.

Reporting by Shivansh Tiwary in Bengaluru; Editing by Aditya Soni

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