May 17, 2022

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New car sales decline with fewer chips, lower production, and lower inventories.  Back to where they were in 1979

New car sales decline with fewer chips, lower production, and lower inventories. Back to where they were in 1979

Toyota, whose sales fell less than those of General Motors and Ford, ranked first in the first quarter.

by Wolf Richter about Wolf Street.

Amid persistent chip shortages and other shortages, production halted, and many dealers running out of stock, US auto sales, measured as the number of vehicles delivered to end users, fell 25.9% in March compared to March of last year, and down 22% compared to a month ago. March 2019, to 1.25 million vehicles.

In the first quarter, sales fell 15.8% from the first quarter of 2021 and by 17.7% from the first quarter of 2019 to 3.28 million vehicles, the worst quarter since 2011.

In terms of the number of cars sold, the auto industry hadn’t grown in the two decades before Covid, with the financial crisis dramatically declining in between. But since early 2021, supply chain issues crippling the industry have intermittently halted production at many plants around the world. Those production outages will run into April – although automakers say components are starting to flow a little better. First-quarter sales are back to where they were in 1979.

What has led to the industries’ revenue growth over the decades is the price hike, which is very important now, with unit sales so far lower. The higher retail prices are a combination of factors: more expensive models, higher MSRPs, and lower incentives by automakers. Several decades of low incentives by automakers contribute to the strange phenomenon that many buyers pay for the sticker.

Buyers spent $45.7 billion on new cars in March, J.D. Power estimates. But that’s down $6.2 billion from March 2021, as higher prices alone weren’t enough to beat the drop in sales.

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The production continues to be criticized. For example, General Motors today halted production of its Chevrolet Silverado 1500 and GMC Sierra 1500 at its Fort Wayne Assembly plant in Indiana for two weeks due to a semiconductor shortage.

When GM announced the plant shutdown last week, it said chip supplies had improved so far this year. But “there continues to be uncertainty and unpredictability in the semiconductor supply base, and we are actively working with our suppliers to mitigate potential issues in the future.”

GM also said that production at its Lansing Grand River plant will be halted throughout the week due to supply chain issues this time unrelated to semiconductors. The factory makes the Cadillac CT4, Cadillac CT5 and Chevrolet Camaro.

Ford has halted production all week, starting today, at its Flat Rock Assembly plant in Michigan, due to a semiconductor shortage. Production at the factory that produces the Mustang has been halted several times this year.

Toyota said it will cut global auto production by 17% in April. Other automakers face similar supply chain problems.

Toyota mentioned On Friday, it sold 194,178 cars in March, down 23.5% year over year. In the first quarter, it sold 515,592 vehicles, down 14.7% year over year. Despite the massive decline, those sales fell by less than those of General Motors and Ford, making Toyota the largest automaker in the United States for the first quarter of the year, ahead of General Motors.

GM, any Reports Quarterly sales only, it said Friday that its first-quarter sales fell 20.1% year-on-year to 512,846 vehicles, with retail sales declining further, and fleet sales up 10% year-over-year. This put GM again behind Toyota.

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GM said production has increased since the end of September. The stock of dealership and transit parts increased to 273,760 vehicles, but that increased from 128,757 units at the end of the third quarter of last year, and from 199,662 vehicles at the end of the fourth quarter. She said GM expects inventories to remain “relatively low”.

stronghold mentioned Today, its March sales fell 25.6% year-on-year to 159,328 vehicles. Fleet sales were up (mostly to rental fleets), but retail sales were down 30.1% year over year. For the first quarter, sales fell 17.1% to 432,132 vehicles

Due to a shortage of inventory, customers resorted to ordering vehicles and waiting for months. Ford said retail customers ordered 50,000 F-Class trucks in March. F Series deliveries in March, due to supply issues, were only 44,906, including fleets. In other words, Ford’s F-Series order backlog grew during the month.

FCAunit of Stellantis, mentioned On Friday, its first-quarter sales fell 14% to 405,221 vehicles. Fiat Chrysler Automobiles Corporation owns the Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo brands. Declining just 14% in the first quarter, sales outperformed the industry, “although impacted by the current supply chain constraints facing our industry,” she said.

Tesla Do not report US sales at all. Tesla said it only reports global sales, which jumped 68% to 310,048 vehicles in the first quarter, thanks to its new Shanghai plant, “despite ongoing supply chain challenges and factory closures.” For the second quarter, production began at its plant in Texas and at its plant in Germany. But its factory in Shanghai closed on March 28, and remains Closed today amid the Covid lockdown in Shanghai.

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It’s interesting to note that Musk was eerily subservient to the authorities in China who enforced the lockdown in Shanghai, and was silent about it, unlike the big mouth defiance in the US when authorities tried to do the same during it. Lockdown in California. He certainly knows how the Chinese authorities deal with billionaires trying to usurp their power structure – and nothing of it is about “free speech” in China, LOL.

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