Chip Shortage: New U.S. Vehicle Sales Drop But Demand Still Greater Than supply
UNITED STATES - Although new vehicle sales in the United States have dropped by over 21 percent in the second quarter, versus a year ago, demand is still greater than supply due to a global shortage of semiconductors in spite of rising inflation, fuel prices and interest rates.
The low supply versus the demand is causing vehicle prices to rise, despite the fact that automakers are reporting fewer vehicles sold this year than last year.
Edmunds.com Inc. which is an American online resource for automotive inventory and information said that automakers sold 3.49 vehicles last quarter. This amounts to around 933,000 fewer vehicles than the same quarter last year.
American consumer research, data, and analytics firm J.D. Power reported that the average price for a new car for the first six months of the year hit almost $45,000, which is about 17.5 percent higher than last year.
General Motors has reported a 15 percent drop in sales, and yet still reported that due to the chip shortage they were forced to leave out parts while manufacturing about 95,000 of their vehicles as a result of the shortage.
Executive vice president of sales at Toyota Motor North America Jack Hollis, said that the shortage in chips did not improve as much as the company had been expecting in the first half of the year. He added that he doesn't see it getting better until next summer. "Every microchip producer is producing at maximum speed because they have maximum demand," he stated. There is no catching up going on. It’s actually falling behind.”
Hollis said that vehicles are being sold within 36 hours of arriving at the dealers. Supply problems are limiting inventory, as well as sales he said.
Ukraine produces around 70% of the world's neon gas, which is used to operate the lasers used in manufacturing semiconductors. While Russia's invasion on Ukraine is greatly influencing the global microchip shortage, a Chinese invasion of Taiwan, which we have covered extensively in the past would greatly exacerbate shortages.
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