ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
Home ABA Banking Journal

A New Inflation Age, Part Three: Vehicles

August 15, 2022
Reading Time: 2 mins read
A New Inflation Age, Part Three: Vehicles

By Nadir Tekarli

The complex nature of supply chains leads us to the final part of this series focusing on the new vehicle market. The U.S. auto market is a $462 billion industry with long supply chains across the globe. More importantly, as most Americans are totally dependent on cars for transportation, the price of vehicles and related services are a key line item in every household’s budget.

The chief problem with auto production globally remains the semiconductor shortage, the topic of the last article. Unfortunately, it does not appear that this problem will abate until the latter half of 2023, at the earliest.

As if semiconductor shortages weren’t enough, rising gas prices have begun to shift consumer demand away from trucks and SUVs for the first time in a decade. Because of the semiconductor shortage, automakers were prioritizing their limited supply for their most expensive vehicles, SUVs and trucks, leaving smaller sedans and hybrid vehicles in shorter supply.

Electric vehicles, which are growing in popularity, are even more susceptible to the supply chain challenges of our time. Unlike internal combustion vehicle production, the massive demand for batteries and electric vehicle infrastructure will remain a problem for years as demand for raw materials such as lithium outstrips supply. Supply is so tight that VW announced it sold out of its 2022 supply of electric vehicles for the U.S. and EU in May. Nissan COO Ashwani Gupta described the situation succinctly: “For me today, the supply chain crisis is the new normal.”

Though demand for autos remains strong, rising interest rates, inflation, and high gas prices will put a damper on affordability while pushing potential new car buyers into the already-hot used car market. Buyers pushed into the used car market will further have to settle for older or higher mileage cars to keep payments within their budget.

Rising interest rates are putting a heavier burden on consumers, with the average monthly payment for a new car rising to $656 in May, up from $559 in May 2019.

The broader economic shift away from goods and back towards services will be a release valve for high demand in most sectors. Pent-up demand for vehicles, though, seems to be the exception with the average American vehicle reaching a record-high age of 12.2 years old. Those cars will need to be replaced, which will keep demand for vehicles high for some time.

Vehicle production will be one of the most difficult supply chains to return to pre-COVID standards. It will be a while before car lots fill back up and consumers are able to resume haggling with sales associates for the best deal.

Nadir Tekarli is an economic research associate at ABA.

ShareTweetPin

Author

Nadir Tekarli

Nadir Tekarli

Nadir Tekarli is an economic research associate at ABA.

Related Posts

ABA DataBank: NFIB Small Business Optimism Index ticks down in September

ABA DataBank: NFIB Small Business Optimism Index ticks down in September

Economy
October 13, 2026

Slower expansion plans could weigh on demand for small-business credit, while sustained inflation and labor costs may pressure small-business margins and debt-service capacity. For banks, these dynamics could temper commercial loan demand.

Consumer Sentiment declined in April

Consumer sentiment falls in October

Economy
October 9, 2026

The University of Michigan Consumer Sentiment Index decreased 3.7% in October compared to the month prior, landing at 46.3, according to preliminary results for the month.

Personal income increased in February

Fed survey finds increase in family income, financial stress

Economy
October 9, 2026

While most U.S. families experienced moderate increases in income and net worth in recent years, the share of families experiencing financial stress also grew, the Federal Reserve said in its triennial Survey of Consumer Finances.

Consumer credit increased in March

Fed: Consumer credit increased 1.9% in August

Economy
October 8, 2026

Consumer credit increased at a seasonally adjusted annual rate of 1.9% in August, according to the Federal Reserve. Revolving credit decreased at an annual rate of 4.2%, while nonrevolving credit increased at an annual rate of 4.1%.

Mortgage rates fall

Mortgage rates rise

Economy
October 8, 2026

The rate for a 30-year fixed-rate mortgage was 7.4% this week. The rate for a 15-year fixed-rate mortgage was 6.73%.

FOMC minutes: Persistent inflation clouds path forward

FOMC minutes show another rate increase possible

Economy
October 7, 2026

Most members of the Federal Open Market Committee believe they may need to raise the target range for the federal funds rate a second time before the end of the year, although that decision will depend on further...

NEWSBYTES

ABA DataBank: NFIB Small Business Optimism Index ticks down in September

October 13, 2026

Consumer sentiment falls in October

October 9, 2026

Fed survey finds increase in family income, financial stress

October 9, 2026

SPONSORED CONTENT

The Shift from Demographic Marketing

The Shift from Demographic Marketing

October 1, 2026
Meeting Ag Lending Goals Without Going It Alone

Meeting Ag Lending Goals Without Going It Alone

October 1, 2026
Beyond the Portfolio: The Wealth Manager’s New Role in a Multigenerational World

Beyond the Portfolio: The Wealth Manager’s New Role in a Multigenerational World

September 17, 2026
Banking Technology at a Strategic Crossroads

Banking Technology at a Strategic Crossroads

September 8, 2026

PODCASTS

Podcast: The birth of American money and how it triggered a revolution

October 8, 2026

Podcast: Creating seamless customer experiences

September 30, 2026

Podcast: Telling a different kind of story about community banks

September 28, 2026

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2026 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2026 American Bankers Association. All rights reserved.