July 1 (Reuters) – General Motors Co ( GM.N ) reported a 15 percent drop in second-quarter auto sales on Friday as a global chip shortage and supply chain disruptions hit production and left nearly 100,000 vehicles waiting for more parts.
The U.S. auto industry is struggling to cope with pent-up consumer demand for new cars as it struggles to ramp up production due to chip shortages, a labor crunch and problems related to supply chain congestion.
GM, which lost its crown as the sales leader last year for the first time since 1931 to Toyota, said it sold 582,401 vehicles in the quarter through June, up from 688,236 a year earlier.
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Still, the Detroit automaker is expected to be the top seller of new vehicles in the quarter, according to Cox Automotive, as industry-wide disruptions reduce inventory at other major automakers.
GM also said it expects net income to be between $1.6 billion and $1.9 billion in the second quarter. Analysts on average were expecting a profit of $2.56 billion, according to data from Refinitiv. It was not immediately clear whether the numbers were comparable.
Automakers are set to report U.S. new car sales for the three months to June on Friday and Tuesday.
Toyota has been one of the hardest-hit automakers this year as chip shortages and China’s COVID-19 lockdown — which has also affected other automakers — forced it to repeatedly cut production, casting a cloud over its production targets for the whole year. Read more
Toyota – along with Stellantis NV ( STLA.MI ), Hyundai Motor Co ( 005380.KS ), Honda Motor Co ( 7267.T ) and Nissan Motor Co Ltd ( 7201.T ) – is poised to report a decline in quarterly sales, with except for Ford, according to data from Cox and TrueCar.
Cox officials said Ford, which reported its June sales on Tuesday, has managed its inventory better than most and is also recovering from last year’s struggles.
Tesla Inc ( TSLA.O ) will be the only major brand to increase sales in the first half of the year, Cox said.
Industry watchers are concerned about the potential impact of multi-decade high inflation and rising gasoline prices on the auto industry, although they point out that demand remains strong right now, which is an unusual situation.
A bigger obstacle to boosting auto sales right now still appears to be an industry-wide shortage of cars and trucks, prompting analysts to cut their full-year sales forecasts.
“A recovery in auto production in 2022 looks very unlikely at this point,” said Jessica Caldwell, executive director of insights at auto industry consultant Edmunds.
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Reporting by Abhijith Ganapavaram in Bengaluru, additional reporting by Ben Klayman in Detroit; Editing by Shinjini Ganguly and Anil D’Silva
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