Light Vehicle Sales Predicted to Increase to 16.2 Million Units in 2022

by Ed Kim, President and Chief Analyst

Our recently released forecast of U.S. light vehicle sales predicts 2022 will reach a total of 16.2 million vehicles sold. This is up from the 15.1 million units actually sold in 2021 during the second year of the ongoing COVID-19 pandemic that continues to cause havoc on the global supply chain and results in drastically short supplies of new vehicles available to consumers

Moving forward into a new year, we expect over a 1 million unit increase over 2021, as chip supply gradually returns and new vehicle inventory starts to fill up again, especially during the second half of 2022. Consumers have money to spend on new vehicles, but with such low supply last year and the start of this year, there is pent-up demand. 2023 will see a return to 17+ million unit volumes, followed by a mild cooling off period over the next couple of years as pent-up demand gets filled, though volumes are expected to stay above 17 million units.

Times are Changing as Consumer Demand for Certain Vehicle Features Shifts

by Deborah Grieb, Director of Marketing and Consumer Insights

AutoPacific’s latest Future Attribute Demand Study (FADS) has indicated a sharp growing interest in certain vehicle features while others have fallen on the wayside. This year, 88,998 new vehicle acquires were surveyed via AutoPacific’s 2021 New Vehicle Satisfaction Survey (NVSS) to determine what features today are hot, and which ones are not. 2020 was a turbulent year for many consumers, a time shaken by the onset of a global pandemic and its still-lingering side effects. The auto industry itself wasn’t immune to the chaos. Health concerns rose while consumer confidence plummeted as lockdowns began. Dealerships saw drastically fewer (if any) foot traffic and vehicle assembly plants went dark. But people were still buying and selling cars albeit at far less of a rate than in 2019 and through different mediums this time around like Carvana, Vroom, along with local dealerships and automakers trying various at-home services like contactless test drives.

Amidst this shift in consumer behavior, priorities, and preferences, we’ve seen four features in our 2021 FADS climb their way into the top ten list from out of the lower ranks including front and rear parking sensors, Apple CarPlay and Android Auto, ventilated/cooled front seats, and LED front exterior accent lighting.

In looking over the list of the top ten most demanded features, heated front seats remains the number one item on consumer wish lists with 66% wanting this on their next new vehicle followed by blind-spot information system (commonly referred to as blind spot monitoring) at number 2 with 60% demand.

Notably, of all ten driver assistance features or ADAS surveyed in the 2021 FADS, demand is the highest for blind-spot information systems, followed by lane departure warning at number five. Consumer demand for other key ADAS systems is noticeably lower like active lane keeping assist (45%), forward automatic emergency braking (41%), and rear cross-traffic alert (38%). This difference may be attributed to the lack of consumer awareness of the benefits of these systems. For example, systems like blind spot monitoring and lane departure warning are often activated much more frequently than systems like forward automatic emergency braking.

“When consumers hear about a vehicle’s ability to stop itself automatically, they are often wary.  When they experience it saving them from committing a driving error, they clearly see the benefit,” says Dan Hall, Vice President of AutoPacific.

As automakers continue to roll out many of these ADAS systems as standard-issue on their products or bundle them together in further options packages, and more consumers learn how crucial these pieces of life-saving tech are, AutoPacific predicts demand will rise.

LED front exterior accent lighting skyrocketed to the number eight most demanded feature for 2021

Two of the hottest features most in demand by new vehicle shoppers this year include Apple CarPlay/Android Auto and LED front exterior accent lighting. The latter jumped 26 spots to the number eight on our top ten list for 2021, likely a result of more and more mainstream vehicles bypassing traditional, simple headlamps and front fascias for more intricate, flashy LED accents adorning the headlights, grille, and even by way of illuminated front emblems like Mercedes-Benz’s glowing star. Once the mark of luxury brands only, LED exterior lighting is enhancing the designs of vheiles in every segment and price point.  In addition to being a design enhancement, LEDs help visibility and have a long life.

Another feature we expect to continue to grow in demand like wildfire, is Apple CarPlay/Android Auto. This popular infotainment feature is found on nearly every new vehicle on sale today, oftentimes as standard-issue, and serves as a great way for drivers and passengers to link their smartphone to the vehicle’s infotainment system to project things like navigation, messages, and music or podcast streaming. Younger shoppers including millennials and tech-savvy Gen X individuals, will only fuel the surge in demand as more and more consumers realize the future is in tethering a smartphone directly to the vehicle.

Survey respondents are individuals who purchased their new vehicle outright, financed it, or leased it and who have completed the survey section regarding their next vehicle. The FADS study closely analyzes the characteristics consumers prefer in their next vehicle and gauges demand for over 100 specific features.

EV Intention is on the Rise, but What’s Driving It?

by Deborah Grieb, Director of Marketing and Consumer Insights

According to data from AutoPacific’s latest Fuel Price Impact Survey (FPIS), 9% of current vehicle owners intend to purchase an EV for their next vehicle, up from 4% just two years ago. The trend survey, issued bi-monthly to AutoPacific’s proprietary VehicleVoice member panel, captures responses from approximately 600 current vehicle owners each survey period.

After hovering around 4-5% for years, the jump in EV intention can likely be attributed to several factors, including more nameplates in the market, financial and driving incentives, environmental concerns, and desire for technology. When asked why they would choose an EV, 85% of respondents agreed with the statement an EV “is better for the environment,” while 80% agreed that EVs are “the way of the future.” It’s exciting to see consumers embrace the future potential for EVs and their place in the world of transportation. With over 120 EV nameplates expected to be on sale in the U.S. in the next 5 years, growing consumer interest is essential.” Can consumer demand grow enough to support 120 EVs?  

Source: AutoPacific Fuel Price Impact Survey April 2021

Fuel Prices Have Little to No Impact on EV Intention

AutoPacific data debunks one past theory surrounding interest - fuel prices. When fuel prices were at their highest, EVs were relatively unknown in the market and not a solution for escaping those high prices. Now that fuel prices have been stable for several years and manufacturers have made significant improvements in fuel economy, consumer choice of an EV can be based on reasons other than desire to save money on gasoline. According to our FPIS data, increases in EV intention are seemingly unrelated to fuel prices, even with recent fuel price increases and future price expectations. 

Source: AutoPacific Fuel Price Impact Survey Sept 2010-April 2021

Need for Social Distancing Causing Vehicle Servicing Delays

by Deborah Grieb, Director of Marketing and Consumer Insights

According to a recent study by AutoPacific, 34% of vehicle owners are choosing to delay or completely forgo their vehicle service during the COVID-19 pandemic, while another 28% will only take their vehicle in for necessary maintenance.

Source: AutoPacific COVID-19 survey (n=1,119)

According to the survey of more than 1,100 vehicle owners, fielded April 9-20, 2020, the need for social distancing is the primary reason for choosing to delay or forgo servicing their vehicle. 68% of respondents said, “I need to social distance; I don’t want to spend time in a waiting room with other owners.” 41% don’t want to be exposed to dealer personnel, and 41% don’t want their vehicle exposed to germs by mechanics, technicians and drivers. Personal finances, such as job loss or reduced income, account for 11% of service delays.

The affects of COVID-19 are being felt in every part of the automotive industry, from manufacturing to sales to service. “The majority of Americans are simply not driving much right now - no road trips, no commuting miles - so people can likely delay their service without causing damage to the vehicle, making service non-essential for the time being” explains AutoPacific president George Peterson.