Chip shortage tanks GM’s third-quarter sales
An American flag flies at a Chevrolet dealership on August 4, 2021 in Glendale, California. In spite of a computer chip shortage, General Motors (GM) posted a $2.8 billion net profit in the second quarter.
Mario Tama | Getty Images
DETROIT – General Motors’ U.S. vehicle sales during the third quarter plummeted by more than 30% from last year as an ongoing shortage of semiconductor chips interrupted vehicle production and cut dealer inventories.
The Detroit automaker on Friday said it sold about 447,000 vehicles from July through September, down 32.8% from a year earlier when sales volumes were depressed due to the coronavirus pandemic. The decline was slightly wider than industry analysts’ expectations of 28.9% and 31.5%.
The chip shortage has caused GM to shutter plants for weeks, if not months, and also partially produce vehicles that are in high demand such as its full-size pickup trucks to then finish when chips become available.
GM warned investors last month its North American wholesale volumes would be down about 200,000 units in the second half of 2021 compared with the first six months of the year. It continues to maintain its financial guidance for the year, including adjusted earnings between $11.5 billion and $13.5 billion, or $5.40 to $6.40 a share.
Every brand for the automaker reported double-digit sales losses in the third quarter, led by a 36.1% decline for Chevrolet.
GM plans to make up some lost volume in the fourth quarter, as Steve Carlisle, GM president of North America, on Friday said the chip supply constraint is improving.
“The semiconductor supply disruptions that impacted our third-quarter wholesale and customer deliveries are improving,” he said in a statement. “As we look to the fourth quarter, a steady flow of vehicles held at plants will continue to be released to dealers, we are restarting production at key crossover and car plants, and we look forward to a more stable operating environment through the fall.”
GM reported its overall sales through September were level with a year ago at about 1.8 million units. Sales for the company’s brands are all up for the year side from Chevrolet, which is down by 5.6% Buick increased by 27.4%, GMC by 8% and Cadillac by 10.8%, according to GM.
GM was among the first major automakers to report third-quarter sales on Friday. Overall, analysts estimate automakers sold less than 3.4 million vehicles, down between 13% and 14% from the same time last year.
South Korean automakers Kia and Hyundai, which have the same parent company but operate separately in the U.S., were expected to be outliers in the third quarter.
Combined, sales for Hyundai-Kia increased 9.1% from a year earlier. The sales beat overall industry expectations but were slightly lower than some analysts forecasted. Hyundai reported a 10.9% increase, including its luxury Genesis brand, and Kia’s sales were up 7.3%.
Asia-based automakers, including Hyundai and Kia, have fared better through the semiconductor chip shortage than U.S. companies.
Others automakers to report September and/or third-quarter sales include:
- Toyota Motor said its third-quarter sales increased 1.4% from the same time last year to 566,005 vehicles, despite a 22.4% decrease in September.
- Stellantis (formerly Fiat Chrysler) sold 410,917 vehicles during the third quarter, down about 19%.
- Honda Motor reported sales of 345,914 in the third quarter, down by 10.9%
- Porsche said it sold 15,289 vehicles during the third quarter, down 1.7% compared with a year earlier.
- Nissan Motor sold 198,955 vehicles during the third quarter, down 10%.