U.S. auto gross sales forecast to plummet in third quarter as chip scarcity plagues {industry}

Honda Motor Co. autos at an AutoNation automobile 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 Photographs

DETROIT – U.S. auto gross sales are anticipated to nose-dive in September, driving purchases of latest autos 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 means of September have been lower than 3.4 million, down between 13% and 14% from the identical time final 12 months when volumes have been depressed because of the coronavirus pandemic.

The extreme decline, together with an anticipated 24% to 26% fall in September, is because of the ongoing scarcity of semiconductor chips for brand new autos.

The elements scarcity has prompted automakers to sporadically shutter vegetation for weeks, if not months. The shortage of manufacturing mixed with sturdy client demand has prompted automobile inventories to plummet to file lows.

“The whole U.S. auto {industry} — together with the Asian producers, which have been doing a bit higher than their home counterparts till just lately — is in an extremely unstable place proper now and we’re seeing inflated retail costs throughout the board,” stated Jessica Caldwell, govt director of insights at Edmunds.

The stock shortages have worsened all year long. Forecasters expects just one million autos to be offered in September, which Cox Automotive experiences can 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 predict 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 maintain 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 file of $42,802 in September, marking a fourth consecutive month over $40,000.

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

The vast majority of automakers who promote autos 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 Normal 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 have risen by about 26%.