Toyota, whose sales fell less sharply than GM and Ford, was No. 1 in the first quarter.
By Wolf Richter for WOLF STREET.
Amid ongoing chip shortages and other shortages, halted production, and depleted inventory at dealerships, U.S. auto sales, as measured by the number of vehicles shipped to consumers, are up 25.9% in March compared to March last year and up 22% from March 2019 to 1.25 million vehicles.
In the first quarter, sales fell 15.8% from the first quarter of 2021 and 17.7% from the first quarter of 2019 to 3.28 million vehicles, the worst first quarter since 2011.
In terms of the number of vehicles sold, the auto industry had not grown in two decades before Covid, with the huge trough of the financial crisis in between. But since early 2021, supply chain issues plaguing the industry have disrupted production at various plants around the world. And those production freezes will last through April — though automakers say components are starting to flow a little better. First quarter sales were back to 1979 levels.
What has fueled industry revenue over the decades has been higher prices, and that matters now that volumes have been declining to date. Higher retail prices are a mix of factors: more expensive models, higher MSRPs, and less incentive from automakers. Decades of low incentives from automakers contribute to the strange phenomenon that many buyers pay via stickers.
JD Power estimated buyers spent $45.7 billion on new vehicles in March. However, that was down $6.2 billion from March 2021 as higher prices alone weren’t enough to weather the sales slump.
Production keeps stalling. For example, GM halted production of the Chevrolet Silverado 1500 and GMC Sierra 1500 at its Fort Wayne Assembly plant in Indiana today for two weeks due to the semiconductor shortage.
When GM announced the plant closure last week, it said chip supply had improved so far this year. But there is “still uncertainty and unpredictability in the semiconductor supplier base, and we are actively working with our suppliers to mitigate potential issues in the future.”
GM also said production at its Lansing Grand River plant will be halted all week due to supply chain issues, this time unrelated to semiconductors. The plant makes the Cadillac CT4, Cadillac CT5 and Chevrolet Camaro.
Ford has halted production at its Flat Rock assembly plant in Michigan for the week beginning today due to semiconductor shortages. Production at the plant that makes the Mustang has been halted several times this year.
Toyota announced it would cut global vehicle production by 17% in April. Other automakers face similar supply chain issues.
Toyota reported on Friday that 194,178 vehicles were sold in March, down 23.5% from a year earlier. 515,592 vehicles were sold in the first quarter, 14.7% less than in the previous year. Despite the massive drop, those sales fell less than GM and Ford sales, making Toyota the largest automaker in the US in the first quarter, a hair ahead of GM.
GM, which only reports quarterly sales, said on Friday its Q1 sales fell 20.1% year-on-year to 512,846 vehicles, with retail sales falling further and fleet sales up 10% year-on-year. This put GM behind Toyota again.
GM said production has increased since late September. Inventory on dealer lots and in transit rose to a still very low 273,760 vehicles, but that was up from 128,757 units at the end of the third quarter last year and up from 199,662 vehicles at the end of the fourth quarter. GM expects inventories to “remain relatively low,” it said.
ford reported today that its March sales fell 25.6% year-on-year to 159,328 vehicles. Fleet sales (mainly to rental fleets) recovered, but retail sales fell 30.1% year-on-year. In the first quarter, sales fell by 17.1% to 432,132 vehicles
Faced with inventory shortages, customers have resorted to ordering vehicles and waiting for months. Ford said retail customers ordered 50,000 F-Series trucks in March. F-Series deliveries totaled just 44,906 in March amid supply issues, including fleets. In other words, Ford’s backlog of retail orders for the F-Series grew during the month.
FCA, a unit of Stellantis, reported Friday that its first-quarter sales fell 14% to 405,221 vehicles. FCA owns the Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo brands. Sales outperformed the industry, falling just 14% in the first quarter, “despite the impact of the existing supply chain constraints our industry is facing,” it said.
Tesla reports no US sales at all. It just reports global sales, which rose 68% to 310,048 vehicles in the first quarter thanks to the new Shanghai factory, “despite ongoing supply chain challenges and factory closures,” Tesla said. For Q2, production has begun at its Texas facility and at its Germany facility. But its Shanghai factory was shut down on March 28 and remains closed today amid Shanghai’s Covid lockdown.
It’s amusing to note that Musk was eerily obsequious to the authorities in China who imposed the lockdown in Shanghai, and he’s been quiet as a mouse about it, in contrast to his loudmouthed defiance in the US when authorities attempted to do the same do the lockdown in california. He sure knows how China’s authorities deal with billionaires trying to usurp his power structure – and nothing from him about “freedom of speech” in China, LOL.
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