During June, the automotive industry has experienced its second consecutive month with a drop in vehicle sales, at 11.2%.
Car shoppers are being scared away by rising prices and inventory shortages.
"While robust domestic demand and an improving health backdrop will keep a floor under vehicle sales through the rest of 2021, the pace of sales will be weighed down by inventory constraints," Oxford Economics' economist Mahir Rasheed told CBS News.
The June numbers have positioned vehicle sales lower than what they were before the COVID-19 pandemic. Notably, domestic vehicle sales dropped by 8.7% from the previous month, and sales of imported vehicles shrank by 13.1%. Truck sales saw a decrease of 8%, CBS News reported.
Oxford Economics projects low-volume sales will last through 2021, according to CBS News. Reduced car inventories are due to the global microchip shortage. The automotive industry has been competing with other businesses for the chips that are needed in car manufacturing. All carmakers are losing a significant amount of money due to this.
Industry analysts said the average price of used cars between April and June had increased to $25,410, nearly a $5,000 increase from the same period last year. While the average price of new vehicles in the second quarter was $40,827, up from $38,895 a year ago, according to Edmunds.
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