DETROIT – General Motors’ U.S. vehicle sales during the second quarter were slightly lower than analyst expectations as an ongoing shortage of semiconductor chips impacted vehicle production and dealer inventories.
The Detroit automaker on Thursday reported sales of 688,236 vehicles during the second quarter, up 39.7% from a year earlier when the coronavirus pandemic caused Americans to shelter in place and temporarily closed auto dealerships. Analysts expected GM’s sales to increase by between roughly 40% and 43%, according to forecasts from auto research firms Edmunds and Cox Automotive.
“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,” said Elaine Buckberg, GM chief economist, in a statement.
GM said it ended the second quarter with only 211,974 vehicles in inventory, a 37% decline from 334,628 at the end of the first quarter. Prior to the coronavirus pandemic impacting vehicle production, the automaker’s inventory levels were about 616,000 units to end 2019.
GM is among the first major automakers to report second quarter sales on Thursday. Overall, analysts estimate automakers sold about 4.5 million vehicles in the U.S. in the second quarter — a 52% to 53% increase compared with the second quarter of 2020.
Sales results for other automakers are coming in slightly below analyst expectations.
Hyundai Motor America reported second quarter sales of 240,005 vehicles, a 69% increase from the muted second quarter of 2020. The sales were lower than Cox Automotive’s forecast of a 74% increase.
Toyota Motor North America reported second quarter sales of 688,813 vehicles, up 73% from a year earlier. That was in-line with Edmunds’ forecast but below the nearly 76% increase expected by Cox.
While the sales recovery from the depths of the pandemic is impressive, the pace of sales this year is slowing. Deutsche Bank analyst Emmanuel Rosner expects June’s sales pace to be 15.7 million vehicles, down from 17.1 million vehicles in May and 18.6 million vehicles in April. Others such as Cox Automotive forecasted a selling rate of about 16.4 million in June.
“The market demand is there but the inventory is not,” former Ford CEO Mark Fields, a TPG Capital senior advisor, said during an interview Thursday on CNBC’s “Squawk on the Street.” “It’s the old supply and demand.”
According to a Cox Automotive, new-vehicle inventory was historically low at the beginning of June, running 43% behind levels for the same period in 2020 and 54% below the same timeframe in 2019.
The low inventories have led to record pricing on new vehicles. According to a Cox Automotive analysis of vAuto Available Inventory data, new-vehicle inventory was historically low at the beginning of June, running 43% behind levels for the same period in 2020 and 54% below the same timeframe in 2019.
Fields said the unprecedented low inventory levels could last for at least the next year to 15 months. He said it’s not going to be a “buyer’s market for some time.”
Others automakers to report June and/or second-quarter sales include:
- Nissan Motor sold 298,148 vehicles during the second quarter, up 68.1%.
- Kia Motors reported sales of 68,486 units in June, a 43.1% increase compared to a year earlier and 378,511 vehicles for the first half of the year, up 43.7%.