US car sales surged in the second quarter. However, the rise could have been much greater.
Automakers are struggling to find the computer chips they need to build enough cars and trucks to meet demand, and in most cases they are temporarily closing their factories as a result of the shortage. Due to tight supply, car prices have risen to record levels and sales have been limited.
Compared to the same period last year, sales looked particularly strong. This was the worst quarter of car sales since the Great Recession. During that period, both the factory and most retailers were closed for different reasons: pandemic-related safety protocols and stay-at-home orders.
However, some automakers have shown improved numbers, even when compared to sales in the first quarter of this year.
Elaine Buckberg, Chief Economist at General Motors, said: “High demand is expected to continue from the second half of this year to 2022.”
GM reported sales in the quarter were up 40% year-over-year, up 7% compared to the first quarter of this year. Toyota’s sales surged 73% compared to a year ago and increased 14% compared to the first quarter.
Sales of Stellantis, an automaker founded by the merger of Fiat Chrysler and PSA Group in France, increased 32% annually, up 3% compared to the first quarter. Hyundai sales were up 69% year-over-year and 43% from the first quarter. Other major automakers will report sales on Thursday or late Friday.
Still, Autotrader executive analyst Michelle Krebs said: The story is in stock, it really plummeted. “
According to Krebs, the latest reading shows that dealers supply vehicles in lots for an average of 30 days, less than half of their normal inventory. And for popular models, it’s much lower.
“Buyers have been postponed because they couldn’t find what they wanted in the lot and the prices were record high,” she said.
Automakers focused more on building larger pickups and SUVs than other vehicles. Sales of GM’s best-selling Chevrolet Silverado pickups increased 30% from the first quarter, and sales of the Chevrolet Suburban SUV increased 21%. Meanwhile, Malibu sedan sales were down 82% from the first quarter and Impala sedan purchases were down 45%.
Demand for cars, especially SUVs and pickups, has returned much stronger than last year’s industry expected, when tens of millions of workers lost their jobs and the economy fell into recession. This is one of the reasons for the lack of computer chips. The automaker canceled orders for chips that it didn’t think it needed and was unable to restore those orders when demand recovered more than expected.
Most automakers say that the second quarter is the hardest time to find chips and they expect supply to improve in the future. However, Ford announced in July that it was planning a temporary closure. This indicates that the problem is not yet in the rearview mirror.
Automakers also limit the number of cars sold to fleet customers, such as car rental companies that buy vehicles in bulk at a discounted price. According to Krebs, it will take some time for automakers to respond to future stagnation in car demand.
“It will take time to fill the pipeline,” she said.
Car sales are on the rise, despite chip shortages limiting supply | Business
Source link Car sales are on the rise, despite chip shortages limiting supply | Business