A Autos

US New Vehicle Sales Crashed To A 10-Month Low Amid Low Inventory

02 July, 2021
new vehicle sales

As I previewed, US new vehicle sales for June declined sharply and came below expectations. According to Wards data, US new vehicle sales decreased by 9.6% MoM to 15.36 million SAAR (lowest since August 2020 and down from 16.99 million prior) and largely trailed expectations of 16.50 million SAAR (Bloomberg consensus).

Such a downward surprise compared to expectations (+5.2%) suggests that the lack of inventory started to affect transactions significantly. The WSJ reported that “U.S. car sales continued at a blistering pace in the second quarter but showed some signs of slowing in June, as the number of vehicles on dealership lots continues to dwindle.” The ongoing chip shortage crisis is gaining traction with lead times, the gap between ordering a semiconductor and taking delivery, rising to 18 weeks in May.

As a result, a lot of automakers were forced to shut down factories which resulted in lack of supply.“Unfortunately the chipset and inventory shortages really came to a head and outstripped supply in June,” said Edmunds.com director of insights Jessica Caldwell. In this context, the auto sector will contribute negatively to June retail sales that will be released on July 16th.