Car sales in the United States continued at a breakneck pace in the second quarter, but showed signs of slowing in June, as the number of vehicles on dealership lots continues to decline.
General Motors Co.
announced a nearly 40% increase in vehicle sales for the second quarter compared to the same period a year ago. Sales at the Detroit automaker were also up from the first quarter, but to a lesser extent, increasing 10% during that time.
Sales for Stellantis STLA 0.66%
NV grew 32% in the second quarter, compared to the April to June period a year ago. Growth for the Jeep brand owner from the first quarter was more modest, up 3% in the second quarter from the first three months of the year.
recorded its best sales in the United States in the first half of nearly half a century while managing tight supplies. The company now has about 32,000 vehicles in inventory while aiming to sell about 30,000 vehicles per month, said Scott Keogh, general manager of Volkswagen’s North American subsidiary.
“We are losing sales opportunities,” Keogh said.
The results of automakers mainly reflect analysts’ expectations that the growth rate of new car sales will start to decline from recent months, when car buyers turned up in near record numbers, buoyed by excessive savings. households and pent-up demand from the pandemic.
Customers are always asking for a new vehicle, dealers say. But it has become more difficult for sellers to match buyers to vehicles due to lack of inventory resulting from a computer chip shortage that has hampered auto production since the winter.
“We really don’t have enough cars to go around,” said Joe Shaker, owner of Shaker Automotive Group, which sells several brands in Connecticut and Massachusetts. He said his Ford F 0.34%
store carries about 14% of its normal inventory.
First-half new vehicle sales are expected to reach around 8.3 million units, according to an estimate by JD Power, an increase of 32% from the same period in 2020 and almost 1% from the first semester 2019.
The pace of sales slowed significantly at the end of the second quarter, falling to an annualized sales pace of $ 15.4 million, according to research firm Wards Intelligence. That’s down from April, when the industry was set to sell nearly 19 million vehicles for the year. The industry tracks the annualized sales rate as a measure of month-to-month market strength because it eliminates seasonal factors.
Analysts attribute the deceleration to shrinking dealer inventories. Dealers began June with around 1.5 million vehicles on their lots or on their way to stores, down 42% from the same period in 2020 and down 23% from early May , according to Wards Intelligence. The decreasing selection pushes prices to record highs.
The average new vehicle sold eclipsed $ 40,000 for the first time in June, according to a JD Power estimate, with car buyers consistently paying above the sticker price.
“We’ve been in a real supply crisis since about June of last year,” said Tyson Jominy, automotive analyst for JD Power. “Meanwhile, we have very, very robust demand among some of the wealthier consumers. “
Consumers are bursting with savings from federal stimulus payments and the collapse during the pandemic. Interest rates remain at historically low levels and used car values have skyrocketed, providing consumers with higher trade-in values when purchasing a new vehicle.
The unusual market dynamics – lots of naked dealers, enthusiastic buyers and intoxicating pricing – are expected to last at least until the end of the year, according to auto analysts and executives. Despite the momentum, many automakers and dealer groups have posted record profits in recent months, supported by higher prices and lower costs.
Bob Carter, Toyota Motor Body
The head of sales for North America said strong consumer confidence helped the company achieve its strongest first five months of the year in its history, despite having to manage a series of supply chain problems.
“We have a lot of problems, but I have no complaints,” he said.
Toyota MC 0.37%
would typically have around 330,000 Toyota and Lexus models on dealer lots in June. He expected dealers to end the month with about 70,000 vehicles on hand, Carter said.
Toyota’s second-quarter sales were up 73% from a year earlier, but showed signs of slowing down in June, down about 35,000 vehicles from the previous month. Rival Honda engine Co.
reported a sales increase of nearly 66% in the second quarter, while its sales rate also declined in June compared to May.
Hyundai engine Co.
reported its best second quarter, with 240,005 vehicles sold between April and June. This is an increase of 69% from the quarter a year ago. The pace slowed in June, when the company sold 72,465 vehicles, down significantly from May when it sold more than 90,000 cars.
Kurt McNeil, GM’s vice president of U.S. sales, said GM dealers have less than a week’s supply of large sport utility vehicles, when they would normally have enough inventory to last three months.
He said GM expects the semiconductor shortage to ease, but does not see the dealership lot situation improving much before the end of the year, and expects that stocks will be limited until 2022. GM said Thursday it ended the second quarter with 211,974 available. vehicles, compared to 334,628 at the end of the first quarter.
“There is so much demand that the vehicles are just going to sell” as soon as they hit dealership lots, McNeil said. “We’re just going to be considerably low for the foreseeable future.”
SHARE YOUR THOUGHTS
Did you buy a car this year? How was your experience? Join the conversation below.
Pickup Trucks and SUVs, Generators of Major Profits for GM and its Competitors Ford Motor Co.
and Stellantis, have been disproportionately affected by the chip shortage, according to data from research firm LMC Automotive. As a result, companies in Detroit saw declining market share in the first five months of the year, while Toyota, Honda and Hyundai gained, LMC said.
Toyota topped GM sales by around 46,500 vehicles in the second quarter, the first time in more than 20 years that a company has surpassed GM sales, and the first quarter in history that Japanese automakers have surpassed their rival Detroit, according to car buying site Edmunds. .com.
Ford on Wednesday said the chip shortage would force it to cut production at more than half a dozen U.S. factories in July.
Automakers in general have prioritized the production of their most popular models, while dealerships have started to allocate inbound vehicles to customers in an effort to expedite shipments to their stores.
said it sold 20% more vehicles in 2021 compared to last year. The Japanese automaker, however, blamed the chip shortage behind the rally’s slowdown in June, when it sold 20% fewer cars than in the same month last year.
Higher prices for used vehicles are also helping to boost new car sales, analysts said, as buyers are keen to take advantage of the higher value of their trade-ins. Pre-owned vehicle prices on average rose about 36% in mid-June from the previous year, according to auction firm Manheim Inc.
The buoyant used car market and the plant’s shortage of deliveries prompted auto dealers to rush to stock their used vehicle lots.
Mr Shaker said the selling price of the new vehicle was no longer his priority in the negotiations. Instead, he tells salespeople to find customers who have a used vehicle they’re willing to trade in.
“Right now it’s a lot more important for us to sell to someone with a trade-in because we need more vehicles to sell,” Shaker said. “When you run out of cars, a customer with a business gives you at least two apple bites. “
—Ben Foldy contributed to this article.
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8Source link