DETROIT – General Motors ‘US vehicle sales in the second quarter were slightly below analysts’ expectations as a persistent shortage of semiconductor chips impacted vehicle production and dealer inventories.
The Detroit automaker reported second-quarter sales of 688,236 vehicles on Thursday, 39.7% more than a year earlier, as the coronavirus pandemic caused Americans to seek shelter and temporarily close car dealerships. According to forecasts by the car research companies Edmunds and Cox Automotive, analysts expected GM’s sales to increase by around 40% to 43%.
“Consumer demand for vehicles is also strong, but limited by very low inventory levels. We expect demand to remain high through the second half of the year and through 2022,” said Elaine Buckberg, GM’s chief economist, in a statement.
All-new Chevrolet cars will be on display on the sale lot at Stewart Chevrolet on May 14, 2021 in Colma, California.
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GM said it ended the second quarter with just 211,974 vehicles in stock, a 37% decrease from 334,628 at the end of the first quarter. Before the pandemic affected vehicle production, the automaker’s inventory was around 616,000 units by the end of 2019.
GM is among the first major automakers to report second-quarter sales on Thursday. Overall, analysts estimate that automakers sold about 4.5 million vehicles in the US in the second quarter – an increase of 52 to 53% compared to the second quarter of 2020.
The sales results of other automakers are slightly below the analysts’ expectations.
Hyundai Motor reported sales of 240,005 vehicles in the second quarter, an increase of 69% over the subdued second quarter of 2020. Sales were below Cox Automotive’s forecast of 74%.
“The situation is just extremely complicated and we are trying to manage and work through it as best we can,” Randy Parker, senior vice president of national sales at Hyundai Motor America, told CNBC. “I think we’re bottoming out in terms of availability, so July and August will be our toughest months … we hope things will improve in the third and fourth quarters.”
Toyota Motor North America reported sales of 688,813 vehicles in the second quarter, up 73% year over year. That was in line with Edmunds’ forecast, but below the nearly 76% increase expected by Cox.
While the sales rebound from the depths of the pandemic is impressive, the pace of sales is slowing this year. Deutsche Bank analyst Emmanuel Rosner expects sales of 15.7 million vehicles in June, compared to 17.1 million vehicles in May and 18.6 million vehicles in April. Others like Cox Automotive forecast a sales rate of around 16.4 million in June.
“Market demand is there, but inventory is not,” said former Ford CEO Mark Fields, a senior advisor to TPG Capital, during an interview on CNBC’s “Squawk on the Street” Thursday. “It’s the old supply and demand.”
The low inventory levels have led to record prices for new vehicles. According to a Cox Automotive, new car inventory was historically low in early June, 43% lower than the same period in 2020 and 54% lower than the same timeframe in 2019.
Fields said the unprecedented low inventory levels could last at least 15 months for the next year. He said it won’t be a “buyers market” for some time.
Other automakers reporting June and / or second quarter sales include:
- Stellantis (formerly Fiat Chrysler) sold 485,312 vehicles in the second quarter, up 32.2%.
- Kia Motors reported sales of 68,486 units in June, up 43.1% year over year and 378,511 vehicles for the first half, up 43.7%.
- According to its own information, Porsche sold 18,958 vehicles in the second quarter, an increase of 55.5% compared to the previous year.
- Nissan Motor sold 298,148 vehicles in the second quarter, up 68.1%.