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Thursday, October 21, 2021

US auto sales slump, stalled due to lack of car computer chips

by Tom Krishna

DETROIT (AP) — In a typical month before the pandemic, Con Paulos’s Chevy dealership in Jerome, Idaho, sold about 40 new vehicles. In September, it was only six. It now has nothing new in stock, and every car, truck or SUV has been sold out on order.

Last month, what happened at his dealership, about 115 miles (185 kilometers) southeast of Boise, was repeated across the country as a worsening global shortage of computer chips led to factory closures, reducing US new vehicle shipments. .

Chip shortages and other parts-supply disruptions led to a nearly 26% drop in US new vehicle sales in September and selection cuts at dealer lots and prices once again hit record highs. This sent many disappointed consumers over the edge to await shortages that have hit the industry since late last year.

According to Edmunds.com, automakers sold just over 1 million vehicles during the month, a figure that included estimates from Ford and others who did not report numbers on Friday. Edmunds said September was the month with the lowest sales of the year.

For the third quarter, sales were 3.4 million, down 13% from the same period a year ago.

Automakers reported some really bad numbers on Friday. General Motors, which only reports quarterly sales, said its deliveries were down about 33% from July to September last year. Stelantis, formerly Fiat Chrysler, saw quarterly sales decline 19%, while Nissan sales were down 10% for the quarter.

Honda’s US sales fell nearly 25% last month, and were down 11% for the quarter. At Toyota, sales for September were down 22% but up just over 1% in the third quarter. Hyundai reported sales of 2% last month but up 4% in the third quarter. Volkswagen’s third-quarter sales were down 8%.

“The September results show that there are not enough vehicles available to meet consumer demand,” said Thomas King, president of data and analytics at JD Power.

J.D. Power said the average selling price of a new vehicle hit a record low of $42,802 last month, breaking an old record set in August of $41,528. JD Power said the average US price is up about 19% from a year ago, when it first broke $36,000. The rise in auto prices has helped prop up US inflation.

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General Motors, which was badly hit by temporary plant closures last quarter, however, expressed some optimism. GM North America president Steve Carlisle said the computer chip shortage is improving.

“As we look into the fourth quarter, a steady flow of vehicles housed at the plants will be released to dealers, we are resuming production at major crossover and car plants, and we will continue to have a more stable operation through the fall. Let’s look forward to the atmosphere,” he said in a statement.

Shortfalls and insanely high prices for both new and used vehicles began last year with the explosion of the pandemic, when several states issued stay-at-home orders. Prices fell and automakers closed factories for eight weeks. The resulting drop in supply came as many co-consumers wanted a new or used vehicle to commute to work or to travel on the road without coming into contact with others.

While auto plants were closed in April and May last year, computer chip makers shifted production to meet wild demand for laptops, gaming devices and tablets. This created a shortage of automotive-grade chips, a problem that may not be fully resolved until next year.

Dealers large and small are reporting record gains due to higher prices, but Paulos fears those days may be over. He is paying the bills and selling used cars as well as making money with the service as people keep their vehicles longer. He’s hoping the new auto shortage has come down and says GM is bringing more factories back online.

“We won’t have any inventory to show people here,” Paulos says. “If we don’t get some supply to the dealers, the record profits we were making will turn into record losses, I fear. It’s hard to sustain yourself without any new flow.”

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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