Automakers’ sales soared in the second quarter as resurgent consumers snapped up sport utility vehicles and pickups, but thin inventories created by the global semiconductor shortage are tempering the pace of the industry’s recovery.
General Motors Co., Toyota Motor Corp. and others said Thursday that their sales soared in the most recent quarter, buoyed by pent-up demand for vehicles as Americans loosened their purse strings following last year’s pandemic-induced slowdown. But automakers like Nissan Motor Co. and Hyundai Motor Co. warned that shrinking inventory due to chip shortages will continue to squeeze sales this summer.
“We’re probably going to hit our lowest peak in terms of inventory levels in July and August,” Randy Parker, senior VP of Hyundai’s U.S. sales, said in an interview with Bloomberg News. “We should start to see things come back starting in September through the end of Q4. But, it’s not going to be back to a normal level of what we’re used to.”
A global semiconductor shortfall has cut auto production worldwide and left showrooms with fewer models to sell, even as pandemic-weary car buyers have been eager to buy. That imbalance has boosted average new car prices, which last month soared above $40,000 for the first time, J.D. Power estimates. Inventory fell to 33 days of supply at the end of May, according to researcher Cox Automotive.
New car sales in the U.S. in the second quarter are projected to have hit 4.4 million vehicles, according to an average of five analyst estimates compiled by Bloomberg. That would mark a 51% increase a year earlier –– a period heavily affected by the onset of COVID-19 shutdowns.
GM said last month that it was boosting output at two truck plants, and only expected the chip shortage to affect its output through July. Ford Motor Co. reversed a downbeat financial forecast for the second quarter and now predicts “significantly better” results compared with last year. But on Wednesday, the carmaker said it would curb production at eight factories in July and August because of the chip shortfall.
“The U.S. economy is accelerating, consumer spending is robust and jobs are plentiful,” Elaine Buckberg, GM’s chief economist, said in a statement. “Consumer demand for vehicles is also strong, but constrained by very tight inventories. We expect continued high demand in the second half of this year and into 2022.”
Most automakers stopped reporting monthly deliveries in 2019, so the second-quarter results are the first peek at industrywide sales trends since early April. Ford and Tesla aren’t expected to release their quarterly numbers until Friday.
Here are highlights from the automakers that are reporting results for last month:
GM: Post-bankruptcy highs
The Detroit-based automaker reported a 40% jump in sales to 688,236 vehicles in the three months through June, including more than doubling deliveries of its cash-cow Chevrolet Silverado pickup. Some GM brands posted the most rosy results since before GM went bankrupt in 2009. Buick had its best quarter in 15 years and the GMC truck unit had its best three months—and first half—since 2005.
Toyota: Hybrid boost
The Japanese carmaker said its deliveries soared 73% to 688,813 vehicles in the quarter and that it had its best-ever first half for sales of pickups and sport utility vehicles. Its top sellers included the RAV4 compact SUV, Camry sedan and Tacoma midsize truck. Toyota also benefited from strong demand for its lineup of gas-electric hybrid models, which accounted for almost a quarter of its total sales last month.
Nissan: Back on track
Nissan Motor Co., which only recently has turned the corner after months of declines, logged a 68% jump in second-quarter sales to 298,148 vehicles. It was helped by its best-selling Rogue compact SUV and budget-friendly Sentra sedan. That represented a second straight quarterly gain after a two-year slump due to stale products and managerial discord at its headquarters in Yokohama.
Hyundai/Kia: Midsize-SUV split
South Korean siblings Hyundai Motor Co. and Kia Corp. each reported record-breaking sales that easily topped pandemic-depressed results from a year earlier. In this year’s first half, Hyundai’s sales shot up 49%, while Kia’s soared 44%. But one of Hyundai’s hottest models–the Palisade midsize SUV–showed uncharacteristic softness in June, with sales down 27%. The Palisade’s counterpart at Kia–the Telluride SUV—didn’t show the same signs of scarcity. Telluride sales more than doubled in June.