New vehicle registrations in Colorado in the first half of the year surged more than 20% from last year's pandemic-slowed pace, according to the Colorado Automobile Dealers Association.
The 123,723 new vehicles registered in the first six months of the year were up 21,180 vehicles from the same period last year, when state COVID-19 pandemic restrictions forced dealers to sell cars and trucks only online. This year's six-month total also is just 1,112 vehicles fewer than the record 124,835 vehicles sold in the first half of 2019. The increase mostly came from light trucks — which include sport utility vehicles — jumping 25% during the first half, while passenger cars fell less than 1%.
In southern Colorado, registration increases are not quite as strong as the rest of the state, increasing 17.8% in the first half of the year from the same period in 2020 to 17,886 vehicles. Denver area registrations were up 19.4% during the same period to 69,038, while registration numbers on the Western Slope posted the state's largest increase at 29.1%, followed by northern Colorado at 19.4%.
Registrations have remained strong despite a continuing shortage of semiconductors, supply bottlenecks and inventory shortages in the manufacturing and sales process, said Tim Jackson, the dealer group's president. Demand for new vehicles remains brisk since loan rates remain near historic lows, wages and household savings are increasing and consumers delayed purchasing new vehicles during the pandemic.
"The shortage (of semiconductors) is expected to get worse over the next one to three months, then will start getting better, but it will take two years to completely catch up to demand," Jackson said. "We are also seeing shortages of foam for seats and for tires. That has reduced the inventory of vehicles available for sale on the lot for many dealers to about 10% of the normal level."
Inventory shortages have meant dealers are less inclined to negotiate on a new vehicle purchase — Jackson said some dealers have told him buyers are willing to pay the sticker price just to be able to buy the vehicle they want. But he noted that manufacturers' suggested retail prices limit dealers' ability to push new vehicle prices higher. As a result of the shortages, Jackson is predicting new vehicle registrations will slow in the second half of the year, ending the year up 9.3% from 2020.
Low new vehicle inventory has meant fewer buyers are trading in new vehicles, so used vehicles are selling even faster than new vehicles — up 24.1% in the first half of the year. A dwindling supply of used vehicles has sent prices soaring; Jackson said the wholesale value of used vehicles has soared between 30% and 50% during the past six months. In some cases, used vehicles are selling for more now than they did when they were sold new, he said.
Other news from the dealer association report:
• Registrations in the second quarter surged 47.4% from the second quarter of 2020, with light truck registrations up 50.4% and passenger car registrations up 31.2% during the same period.
• The top five selling brands in the first half of the year were Toyota, Ford, Subaru, Chevrolet and Jeep. The top five selling models were all either pickup trucks or sport utility vehicles.
• New electric and hybrid vehicle registrations more than doubled in the first half of the year, compared with a year earlier, to 15,101 and now make up more than 12% of the new vehicle market.