October 5, 2023
Ford’s U.S. gross sales fall 33% as chip scarcity devastates auto trade

Ford’s U.S. gross sales fall 33% as chip scarcity devastates auto trade

DETROIT – U.S. gross sales of Ford Motor’s new automobiles final month declined by 33.1% from a yr earlier as a result of an ongoing international scarcity of semiconductor chips that is wreaking havoc on the automotive trade, the corporate stated Thursday.

The Detroit automaker’s gross sales capped off a dismal month of U.S. auto gross sales in August, which plummeted to an adjusted promoting fee of 13.09 million automobiles. That is the worst tempo since June 2020 and down from this yr’s peak of 18.5 million in April, in response to auto information agency Motor Intelligence.

Analysts anticipated the August promoting tempo to be between 13.1 million and 14.4 million automobiles, with J.D. Energy and LMC Automotive forecasting general gross sales to say no by 13.7% in contrast with August 2020.

The gross sales tempo for any given month measures what number of automobiles the trade would promote for the yr if it bought the identical quantity each month. It is a fundamental barometer of the trade’s well being and demand.

August is traditionally one of many larger auto gross sales months of the yr, however the chip scarcity has brought on car stock ranges to plummet to report lows and pricing of recent automobiles and vans to skyrocket.

The Ford firm brand is displayed on an indication exterior of the Chicago Meeting Plant on February 03, 2021 in Chicago, Illinois.

Scott Olson | Getty Photographs

Sellers solely have about 942,000 automobiles in stock for retail sale, in contrast with roughly 3 million earlier than the coronavirus pandemic two years in the past, in response to Thomas King, president of the information and analytics division at J.D. Energy.

“Though stock is arriving at sellers every day, it’s merely changing the automobiles being bought, stopping sellers from rising inventories to a degree essential to help a better gross sales tempo,” King stated.

Whereas most main U.S. automakers have switched to quarterly gross sales reporting, a number of others that also report month-to-month gross sales resembling Honda and Subaru additionally reported double-digit losses in August. Toyota, Volvo, Hyundai and Kia reported slight gross sales will increase or losses in contrast with a yr in the past.

Gross sales of practically each car in Ford’s lineup had been down final month in contrast with final yr, with incremental gross sales good points from some new automobiles resembling its Bronco SUVs. Most notably, Ford’s bestselling F-Sequence pickups declined by 22.5%.

Car inventories hit record low

Ford’s whole gross sales final month topped 124,176 automobiles. Truck gross sales had been down by practically 30%, whereas SUVs had been off by 25.3% and automotive gross sales fell by 86% from August 2020.

A silver lining for Ford final month was that its retail gross sales had been up by 6.5% in contrast with July however nonetheless off by 33% from August 2020, in response to Andrew Frick, vp, Ford Gross sales U.S. and Canada.

Ford’s gross sales come a day after the automaker confirmed it was as soon as once more slicing manufacturing of its F-150 pickup truck and different extremely worthwhile automobiles because of the ongoing international scarcity of semiconductor chips.

The origin of the scarcity dates to early final yr when Covid brought on rolling shutdowns of car meeting vegetation. Because the services closed, the wafer and chip suppliers diverted the components to different sectors resembling client electronics, which weren’t anticipated to be as harm by stay-at-home orders.

The issue is anticipated to price the worldwide automotive trade $110 billion in income in 2021, in response to consulting agency AlixPartners.

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