Car Sales Rise Despite Chip Shortage Limiting Supply | Business

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Car sales in the United States surged in the second quarter. However, the increase could have been much larger.

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 due to the shortage. Due to the tight supply, car prices reached record highs and sales were limited.

Compared to the same period last year, sales seemed particularly strong. This was the worst quarter of car sales since the Great Recession. During that time, the factory and most retailers were closed for a variety of reasons: pandemic-related safety protocols and stay-at-home orders.

However, some automakers have posted an improvement in numbers, even compared to sales in the first quarter of this year.

Elaine Buckberg, chief economist at General Motors, said: “Strong demand is expected to continue from the second half of this year through 2022.”

GM said sales in the quarter were up 40% year-over-year, up 7% from the first quarter of this year. Toyota sales jumped 73% from a year ago and 14% from the first quarter.

Sales of Stellantis, an automaker born from the merger of Fiat Chrysler and the PSA group in France, rose 32% per year, up 3% from the first quarter. Hyundai sales increased 69% year-over-year and 43% from the first quarter. Other major automakers will publish their sales on Thursday or Friday evening.

Still, Michelle Krebs, executive analyst for Autotrader, said: The story is in stock, it has really fallen. “

According to Krebs, the latest reading shows dealers supply vehicles in batches for an average of 30 days, less than half of their normal stock. And for popular models it is much lower.

“The buyers were postponed because they couldn’t find what they wanted from the lot and the prices were record high,” she said.

Automakers have focused more on building larger pickup trucks and SUVs than other vehicles. Sales of GM’s best-selling Chevrolet Silverado pickup trucks were up 30% from the first quarter, and sales of the Chevrolet Suburban SUV were up 21%. Meanwhile, sales of Malibu sedans are down 82% from the first quarter and purchases of Impala sedans are down 45%.

Demand for cars, especially SUVs and vans, returned much stronger than expected last year, 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 it didn’t think it needed and couldn’t reinstate those orders when demand picked up more than expected.

Most automakers say the second quarter is the toughest time to find chips and they expect the supply to improve in the future. However, Ford announced in July that it was planning a temporary shutdown. 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 wholesale at a reduced price. According to Krebs, it will take some time for automakers to react to future stagnation in demand for cars.

“It will take time to fill the pipeline,” she said.

Car Sales Rise Despite Chip Shortage Limiting Supply | Business

Source link Car Sales Rise Despite Chip Shortage Limiting Supply | Business


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