Four of the largest car and truck dealers in the United States said on Friday that their sales had fallen recently, reflecting the intense pressure a global semiconductor shortage has placed on auto production.
General Motors, Honda, Nissan and Stellantis reported significant declines in sales in the three months ending in September – in GM’s case, a drop of one-third from the previous year – as chip shortages have forced them to close their factories, leaving dealerships with few vehicles to offer customers.
Toyota saw a slight increase for the quarter, but sales in September fell sharply after being forced to cut global production due to chip shortages and other disruptions to its parts supply due to the pandemic of coronavirus.
“We are in uncharted waters,” said Alan Haig, president of Haig Partners, an automotive consultant. “We’ve never seen a shortage of vehicles like this. There are simply not enough cars to sell.
The semiconductor shortage stems from the onset of the pandemic, when automakers around the world shut factories for weeks and suddenly cut orders for computer chips. At the same time, manufacturers of laptops, game consoles and other electronics demanded more chips as sales of their products soared among homebound consumers.
When automakers resumed production, chipmakers had much less production capacity to allocate to auto chips.
Strong auto sales, boosted in part by government stimulus controls, helped prop up consumer spending in the first year of the pandemic. But now production delays and depleted stocks are hurting sales as waning government support and the rise of the Delta variant of the coronavirus dampen consumer spending.
Forecasting firm IHS Markit lowered its estimate of third-quarter consumer spending growth to an annual rate of just 0.4% on Friday from 12% in the second quarter, contributing to a sharp slowdown in overall economic growth.
Automakers have tried to use the electronic components they have in stock for their most profitable vehicles, such as pickup trucks and large sport utility vehicles. But in recent months, these models have also been affected.
With fewer vehicles coming off the assembly lines, dealer inventories have become meager. Kenosha Toyota in Wisconsin had just one new vehicle for sale on Friday – a two-wheel-drive Tacoma pickup. Suburban Chevrolet of Ann Arbor, Mich. Had only 11 new models for sale on its website.
Despite the shortage, automakers and dealers are making big profits as tight stocks have forced consumers to pay higher prices. JD Power estimated the average selling price of a new vehicle in September to be $ 42,802, up more than $ 12,000 from the same month in 2020.
“This is a boon for dealers and factories, despite the shortage of inventory,” Haig said.
As new cars are scarce, used car prices have also skyrocketed. And the latest sales figures raise concerns that the inventory shortage is worsening and hampering sales.
“There are simply not enough vehicles available to meet consumer demand,” said Thomas King, president of the data and analytics division of JD Power.
At General Motors, sales fell 33 percent in the quarter. The automaker sold 446,997 vehicles, up from 665,192 light trucks and cars a year earlier. In the same quarter of 2019, GM sold 738,638.
Honda sales fell 11 percent in the quarter, to 354,914 cars and trucks. But a drop of nearly 25 percent in September from the previous year showed increasing pressure on production. Stellantis, which was formed by the merger of Fiat Chrysler and French company Peugeot, announced a 19% drop in sales in the third quarter. At Nissan, the drop was 10%.
Toyota said its sales for the quarter were about 1% higher than a year earlier, at 566,005. But sales for September were down 22%.
General Motors does not publish monthly sales figures. Ford is expected to report third quarter sales on Monday.
The semiconductor shortage forced manufacturers to shut down factories for weeks. GM idled several pickup truck factories during part of August and September. Toyota cut global production by 40% in September and expects a similar reduction in October.
General Motors stressed that the lack of potential buyers was not the problem. “The underlying demand conditions remain strong, thanks to the many job openings, the growing demand for refouled vehicles and the excess savings accumulated by many households during the pandemic,” said Elaine Buckberg, chief economist of GM, in a statement.
And the company reported that the chip supply was improving. “We look forward to a more stable operating environment through the fall,” said Steve Carlisle, president of GM North America.
At the end of September, GM had 128,757 vehicles in dealer inventories, down from 211,974 at the end of June and to over 334,000 at the end of the first quarter. In years past, the figure was often around 800,000.
Toyota had 37,516 vehicles on dealer lots at the end of the quarter and 61,208 in ports serving the US market. At the current selling rate, this is enough to last about 18 days.
Ben Casselman contributed reports.