DETROIT (AP) – New vehicle sales in the US fell more than 21% in the second quarter from a year ago as the global semiconductor shortage continued to cause manufacturing problems for the industry.
Yet demand still outpaced supply from April to June, even with $5 a gallon of gasoline, high inflation and rising interest rates. The low supply has pushed prices to record levels, knocking many consumers out of the new vehicle market.
Edmunds.com said automakers sold 3.49 million vehicles in the quarter, nearly 933,000 less than the same period last year.
JD Power estimates that the average sales price of a new vehicle for the first six months of the year was nearly $45,000, a record 17.5% higher than a year ago. Edmunds.com reported that 12.7% of consumers who financed a new vehicle in June had monthly payments of $1,000 or more.
At General Motors, which reported a 15% drop in sales, a shortage of chips and other parts forced the company to build 95,000 vehicles without any part. The incomplete vehicles are expected to be ready and sold by the end of the year.
Jack Hollis, Toyota’s head of sales in North America, said the chip shortage hasn’t improved as much in the first half of the year as the company had expected, and he doesn’t see it getting much better until next summer.
“Every microchip manufacturer is producing at maximum speed because they have maximum demand,” Hollis said. “There is no catching up going on. It is actually lagging behind.”
Toyota’s sales fell 19% in the first half of the year and 18% in June. This allowed GM to pass the Japanese company and recapture the crown as the top-selling automaker in the US, a title GM lost last year.
Stellantis, formerly Fiat Chrysler, recorded a 16% drop in sales. Honda’s second-quarter sales fell by more than half, with the company blaming “serious” supply chain problems. Nissan’s sales fell nearly 39% in the quarter and Hyundai posted a 23% drop in sales.
Most automakers reported sales on Friday, but Tesla is likely to do so this weekend and Ford won’t report until Tuesday.
Edmunds predicted nearly 3.5 million new vehicles were sold in the US in the quarter, 20.8% less than the same period a year ago. Edmunds expects inventory shortages to continue for the foreseeable future, which frustrates car buyers.
“The majority of consumers who buy cars under these circumstances are either in a financial position where money is less important, or are doing so out of absolute necessity,” said Edmunds analyst Jessica Caldwell.
Toyota’s Hollis said demand remains exceptionally strong, especially for more efficient gas-electric hybrid vehicles and the company’s electric vehicle, the BZ4x. Hybrids and plug-ins accounted for about 27% of Toyota’s sales in June, following an upward trend, he said.
But delivery problems are limiting inventory and sales, Hollis said. The company started June with 9,000 vehicles on dealer lots and ended the month with about 8,500, he said. Vehicles are sold at dealers within 36 hours of arrival.
Hyundai announced it would stop selling its small Accent and Veloster cars in the US, furthering the trend of automakers cutting car models as SUVs have become America’s preferred body shape.
Randy Parker, Hyundai Motor America’s head of sales, said he expects the chip shortage to gradually improve this year, and predicts a 30% increase in production from last year.
The company’s flagship electric vehicle, the Ioniq 5, is selling strongly, with nearly 7,500 delivered in the second quarter, Parker said.
But smaller, fuel-efficient petrol vehicles don’t seem to fare as well. Hyundai’s Elantra compact car saw a 44% drop in sales during the quarter, but sales were halted for some time due to a safety recall issue.
Honda Civic sales fell 54% in the first half and Toyota Corolla compact car sales fell 25% from January to June.