DETROIT – Sales of new Ford Motor vehicles in the United States fell 33.1% last month from a year earlier due to global shortage of semiconductor chips that wreaked havoc on the U.S. automobile, the company said Thursday.
Detroit car sales ended a grueling month of U.S. car sales in August, which fell to an adjusted sales rate of 13.09 million vehicles. This is the worst pace since June 2020 and has dropped from this year’s high of 18.5 million in April, according to car data firm Motor Intelligence.
Analysts expected the August sales pace to be between 13.1 and 14.4 million vehicles, with JD Power and LMC Automotive forecasting overall sales to decline 13.7% compared to August 2020.
The sales rate for a given month measures how many cars the industry would sell per year if it sold the same amount each month. It is the leading barometer of health and industry demand.
Historically, August is one of the highest car sales months of the year, but the shortage of chips has caused vehicle inventory levels to plummet to record lows and car prices and new trucks disappear.
The Ford company logo is displayed on a sign outside the Chicago assembly plant on February 3, 2021 in Chicago, Illinois.
Scott Olson | Getty Images
According to Thomas King, president of JD Power’s data and analysis division, dealers only have an inventory of 942,000 vehicles for retail, compared to about 3 million before the coronavirus pandemic two years ago, according to Thomas King.
“While inventory reaches dealers on a daily basis, it simply replaces the vehicles being sold, preventing dealers from raising inventories to a level needed to support a higher pace of sales,” King said.
While most major U.S. automakers have shifted to quarterly sales reporting, several others that still report monthly sales, such as Honda and Subaru, also reported double-digit losses in the August. Toyota, Volvo and Hyundai and Kia reported slight increases or losses in sales compared to a year ago.
Sales of almost every vehicle in Ford’s range fell last month compared to last year, with incremental gains in sales of some new vehicles, such as its Bronco SUVs. In particular, Ford’s best-selling F-Series pickups fell 22.5%.
Ford’s total sales last month topped 124,176 vehicles. Truck sales fell nearly 30%, while SUVs fell 25.3% and car sales fell 86% as of August 2020.
A positive issue for Ford last month was that its retail sales increased 6.5% compared to July, but continued to fall 33% from August 2020, according to Andrew Frick, vice president of Ford Sales, USA and Canada.
Ford’s sales come a day after the automaker confirmed it was cutting production again for its F-150 pickup truck and other highly profitable vehicles due to the global shortage of semiconductor chips.
The origin of the shortage dates back to early last year, when Covid caused rotating shutdowns of vehicle assembly plants. When the facility closed, suppliers of wafers and chips diverted the parts to other sectors, such as consumer electronics, which were not expected to be so affected by home orders.
According to consulting firm AlixPartners, the problem is expected to cost the global auto industry revenue by $ 110 billion by 2021.