Oct. 26—Beset by economic headwinds, Colorado's new vehicle registrations declined 14.5% through the first nine months of the year compared with the same period in 2021, according to a report released this week by the Colorado Automobile Dealers Association.

Supply chain issues, limited inventories, surging inflation and increasing interest rates are among challenges creating concern for auto dealers, the report said. But there is also cause for optimism as demand remains strong, the report added. And the decline is not as severe as the U.S. market as a whole, which saw registrations fall 16.9% in the same period.

"The good news is Colorado's new vehicle market continues to outperform the U.S. market," Colorado Automobile Dealers Association President Tim Jackson said in a news release. "Other positives are a continuing pent-up demand for new vehicles, along with expected improvement in the automotive supply chain in the next 12 months, which can encourage manufacturers to lower prices on new vehicles to move more sales."

Other highlights from the group's auto outlook included:

— Used vehicle registrations were also down in Colorado year to date from the same period in 2021, but to a lesser degree at 11.8%. Late-model used vehicles are defined as those models that are seven years old or newer.

— Hybrid vehicle registrations saw an 8% year-over-year increase. Battery electric vehicle registrations saw a 41% year-over-year increase and plug-in hybrid vehicles a 20% year-over-year increase.

— Among Colorado's top five selling brands through the first nine months of the year, Toyota led with a 14.8% market share, followed by Ford at 11.6%, Subaru at 8.8%, Chevrolet at 6.4% and Jeep at 6.3%.

— Vehicle prices, which have soared because of supply constraints, could decrease as supply chain issues improve. In addition, manufacturers could ramp up incentives, "which have all but disappeared in the past year."

Kevin Shaughnessy, vice president of operations and partner with Phil Long Dealerships, said the Colorado Springs-based dealership group was doing better than the rest of the state with car sales up 0.2% for the year.

In addition to carrying the top five selling brands, Shaughnessy said Phil Long Dealerships blunted the impact of supply chain problems.

"We found dealers in other parts of the country that weren't having the demand we were and brought that into Colorado to meet our customers' demands," Shaughnessy said.

While affordability is still a challenge for some buyers, custom factory orders have helped meet customers' needs for those who can afford to wait to get their vehicle.

"We want to make sure we have enough supply and the right inventory to serve our customers," Shaughnessy said.