US car sales fell, stalled by a shortage of car computers

Sales of new cars in the US fell in September as a global shortage of computer chips worsened, factories closed and limited the range of dealerships

DETROIT – In a normal month before the pandemic, Con Paulos’ Chevy dealer in Jerome, Idaho, sold about 40 new vehicles. In September, there were only six. Now he has nothing new in stock and every car, truck or SUV on order has been sold.

Last month, what happened at his dealership about 185 miles (185 kilometers) southeast of Boise was repeated across the country as factory closures due to a worsening global shortage of computer chips pushed U.S. new vehicle shipments.

Predictors expect sales in September to fall around 25% compared to last year, as chip shortages and other supply disruptions in parts cut the committee on dealer lots and raised prices again to record levels. It sent many frustrated consumers to the sidelines to await a shortage that has hampered the industry since the end of last year.

JD Power expects U.S. automakers to sell just over 1 million cars in September at an annual sales rate of 12.2 million. That is a rate that is 4 million lower than last year and 4.9 million during September 2019.

For the third quarter, JD Power expects sales to fall just over 13% from the same period a year ago.

Honda’s US sales fell nearly 25% last month and fell 11% in the quarter. At Toyota, sales fell by 22% in September, but rose just over 1% in the third quarter.

“September results show that there are simply not enough vehicles available to meet consumer demand,” said Thomas King, president of data and analytics at JD Power.

The average selling price of a new vehicle hit a record $ 42,802 last month, beating the old record of $ 41,528 set in August, JD Power said. The average U.S. price is nearly 19% higher than a year ago, when it broke $ 36,000 for the first time, JD Power said. The automatic price increases have helped to increase US inflation.

However, General Motors, which was hit hard by temporary plant closures in the last quarter, expressed some optimism. Steve Carlisle, president of GM North America, said the shortage of computer chips is improving.

Shortages and insanely high prices for both new and used vehicles began with the outbreak of the pandemic last year, when many states issued home orders. Prices plummeted, and automakers closed factories for eight weeks. The resulting decline in supply came, just as many consumed consumers wanted a new or used vehicle to commute to work or go on road trips without getting in touch with others.

While car factories were shut down in April and May last year, computer chip manufacturers switched production to meet the wild demand for laptops, gaming devices and tablets. It created a shortage of chips in the automotive industry, a problem that may not be completely resolved until next year.

Due to the high prices, large and small retailers are reporting record profits, but Paulos fears these days may be over. He pays the bills and makes money with used car sales as well as service as people keep their vehicles longer. He hopes the new car shortage has hit rock bottom and says GM looks set to bring more factories back online.

“We have no warehouse to show people here,” Paulos says. “If we do not get a supply for the dealers, the record profit we got will be a record loss, I am afraid. It’s hard to sustain yourself without some new flow. ”

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