New car sales up 17% as availability clouds future

 
458Views 0Comments Posted 02/05/2022

 

The sale of new cars totaled 9,371 units in the first quarter up 17.7%  from the 7,963 units in the same period of the previous year, according to data provided by the Association of Automobile Dealers of Panama (ADAP).

The increase is explained by a recovery in demand as in 2021,  there were business closures ordered by the authorities to contain the second wave of coronavirus

The results of 2022 also improve on the data of the first quarter of 2020 (9,112 vehicles), partially affected by the first restrictions of the pandemic, but still far from the records of 2019 (11,292).

While the worst of the pandemic is to be behind us, and while demand is responding, the current concern for the industry is supply and, the ability to meet existing demand.

For the second quarter, the sales expectation is lower than that of the same period of the previous year due to the lack of capacity of manufacturers to meet the needs of the market.

The brands are affected by the limited supply of microchips and semiconductors, and this ends up ultimately translating into greater delays in the shipment of vehicles.

Bogdan Batinovich, president of the ADAP said that before this situation occurred, there was sufficient inventory of any product, while currently, the inventory is limited and in some cases as vehicles are delivered because they are pre-sold.

Car prices
On the other hand, the inflationary pressures caused by the increase in the cost of raw materials, the increase in fuel, and the tensions in the supply chain are also transferred to the price of cars.

Despite the challenges that exist, the industry expects supply capacity to improve as the year progresses and has growth expectations of around 17% for the whole of 2022, with a sales volume of around 45,000 units.