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U.S. auto sales forecast to plummet in third quarter as chip shortage plagues industry

Honda Motor Co. automobiles at an AutoNation automotive dealership in Fremont, California, U.S., on Monday, Feb. 15, 2021. AutoNation Inc. is scheduled to launch earnings figures on February 16.

David Paul Morris | Bloomberg | Getty Photos

DETROIT – U.S. auto gross sales are anticipated to nosedive in September, driving purchases of latest automobiles down within the third quarter by at the least 13% because the chip scarcity continues to disrupt manufacturing, new {industry} estimates present.

Forecasts from Cox Automotive, Edmunds and J.D. Energy/LMC Automotive predict automobile gross sales from July by way of September had been lower than 3.4 million, down between 13% and 14% from the identical time final 12 months when volumes had been depressed as a result of coronavirus pandemic.

The extreme decline, together with an anticipated 24% to 26% fall in September, is as a result of ongoing shortage of semiconductor chips for brand new automobiles.

The elements scarcity has triggered automakers to sporadically shutter crops for weeks, if not months. The dearth of manufacturing mixed with sturdy shopper demand has triggered automobile inventories to plummet to file lows.

“Your complete U.S. auto {industry} — together with the Asian producers, which had been doing a bit higher than their home counterparts till not too long ago — is in an extremely unstable place proper now and we’re seeing inflated retail costs throughout the board,” mentioned Jessica Caldwell, govt director of insights at Edmunds.

The stock shortages have worsened all year long. Forecasters expects only one million automobiles to be offered in September, which Cox Automotive stories could be among the many lowest quantity up to now decade.

The gross sales tempo within the U.S. market has fallen each month since reaching a peak of 18.3 million in April. It is anticipated to be 12.1 million to 12.2 million in September.

Cox analysts predicts automobile provide will enhance mildly within the fourth quarter, and proceed to enhance all through 2022, however will not return to “regular” till 2023 – if ever. Automakers have promised to keep leaner inventories sooner or later to spice up automobile earnings and costs, which have been at file ranges.

J.D. Energy expects common transaction costs will attain a brand new file of $42,802 in September, marking a fourth consecutive month over $40,000.

“The mismatch between sturdy shopper demand and constrained stock is resulting in increased automobile costs,” mentioned Thomas King, president of the information and analytics division at J.D. Energy.

Nearly all of automakers who promote automobiles within the U.S. are scheduled to report third-quarter gross sales on Friday. Ford Motor is anticipated to report gross sales on Monday.

Edmunds expects General Motors and Ford to have the most important third-quarter gross sales declines of 31.5% and 29.3%, respectively. An outlier for the quarter is anticipated to be Hyundai/Kia, which Edmunds forecasts will probably be up by 10.1%. Cox Automotive additionally expects Tesla’s third-quarter gross sales to be up by about 26%.

https://www.cnbc.com/2021/09/30/us-auto-sales-forecast-to-plummet-in-third-quarter-as-chip-shortage-plagues-industry.html | U.S. auto gross sales forecast to plummet in third quarter as chip scarcity plagues {industry}

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