Ford U.S. sales drop 33% as chip shortage devastates auto industry

DETROIT – Ford Motor’s U.S. sales of new vehicles last month were down 33.1% from a year earlier due to a persistent global shortage of semiconductor chips that is wreaking havoc in the industry. automotive industry, the company said Thursday.

Sales of the Detroit automaker closed a dismal month of US auto sales in August, which fell to an adjusted sales rate of 13.09 million vehicles. It’s the worst pace since June 2020 and down from this year’s high of 18.5 million in April, according to automotive data firm Motor Intelligence.

Analysts expected August sales pace to be between 13.1 million and 14.4 million vehicles, with JD Power and LMC Automotive forecasting overall sales to decline 13.7% from August 2020.

The pace of sales for a given month measures the number of cars the industry would sell for the year if it sold the same amount each month. It is a primary barometer of health and industry demand.

August is historically one of the highest auto sales months of the year, but the chip shortage has caused vehicle inventory levels to plummet to record levels and prices for cars and vehicles. new trucks have skyrocketed.

Dealerships only have about 942,000 vehicles in stock for retail, up from about 3 million before the coronavirus pandemic two years ago, according to Thomas King, president of the data and analytics division at JD Power.

“While inventory arrives at dealerships daily, it simply replaces the vehicles sold, preventing dealers from increasing inventory to a level necessary to support a higher sales pace,” King said.

While most of the major US automakers have switched to quarterly sales reports, several others that still report monthly sales, such as Honda and Subaru, also reported double-digit losses in August. Toyota, Volvo and Hyundai and Kia reported slight increases or losses in sales compared to a year ago.

Sales of almost all vehicles in the Ford lineup fell last month compared to last year, with further sales gains of some new vehicles such as its Bronco SUVs. Most notably, Ford’s best-selling F-series pickup trucks were down 22.5%.

Ford’s total sales last month exceeded 124,176 vehicles. Truck sales are down almost 30%, while SUVs are down 25.3% and car sales are down 86% from August 2020.

A silver lining for Ford last month was that its retail sales were up 6.5% from July but still down 33% from August 2020, according to Andrew Frick, vice president, Ford Sales US and Canada.

Ford’s sales come a day after the automaker confirmed it was once again cutting production of its F-150 pickup truck and other high-profit vehicles due to the current global shortage of semiconductor chips.

The origin of the shortage dates back to early last year when Covid caused gradual closures of vehicle assembly plants. As the facility closed, wafer and chip suppliers diverted parts to other industries such as consumer electronics, which should not be as affected by home orders.

The problem is expected to cost the global auto industry $ 110 billion in revenue in 2021, according to consulting firm AlixPartners.