DETROIT – U.S. sales of Ford Motor’s new vehicles last month declined by 33.1% from a year earlier due to an ongoing global shortage of semiconductor chips that’s wreaking havoc on the automotive industry, the company said Thursday.
The Detroit automaker’s sales capped off a dismal month of U.S. auto sales in August, which plummeted to an adjusted selling rate of 13.09 million vehicles. That’s the worst pace since June 2020 and down from this year’s peak of 18.5 million in April, according to auto data firm Motor Intelligence.
Analysts expected the August selling pace to be between 13.1 million to 14.4 million vehicles, with J.D. Power and LMC Automotive forecasting overall sales to decline by 13.7% compared to August 2020.
The sales pace for any given month measures how many cars the industry would sell for the year if it sold the same amount every month. It’s a main barometer of the industry’s health and demand.
August is historically one of the higher auto sales months of the year, but the chip shortage has caused vehicle inventory levels to plummet to record lows and pricing of new cars and trucks to skyrocket.
Dealers only have about 942,000 vehicles in inventory for retail sale, compared with roughly 3 million prior to the coronavirus pandemic two years ago, according to Thomas King, president of the data and analytics division at J.D. Power.
“Although inventory is arriving at dealers daily, it is simply replacing the vehicles being sold, preventing dealers from increasing inventories to a level necessary to support a higher sales pace,” King said.
While most major U.S. automakers have switched to quarterly sales reporting, 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 sales increases or losses compared with a year ago.
Sales of nearly every vehicle in Ford’s lineup were down last month compared with last year, with incremental sales gains from some new vehicles such as its Bronco SUVs. Most notably, Ford’s best-selling F-Series pickups declined by 22.5%.
Ford’s total sales last month topped 124,176 vehicles. Truck sales were down by nearly 30%, while SUVs were off by 25.3% and car sales fell by 86% from August 2020.
A silver lining for Ford last month was that its retail sales were up by 6.5% compared to July but still off by 33% from August 2020, according to Andrew Frick, vice president, Ford Sales U.S. 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 highly profitable vehicles due to the ongoing global shortage of semiconductor chips.
The origin of the shortage dates to early last year when Covid caused rolling shutdowns of vehicle assembly plants. As the facilities closed, the wafer and chip suppliers diverted the parts to other sectors such as consumer electronics, which weren’t expected to be as hurt by stay-at-home orders.
The problem is expected to cost the global automotive industry $110 billion in revenue in 2021, according to consulting firm AlixPartners.