ARLINGTON, Va.–The annualized pace of new vehicle sales during July fell to 14.8 million after averaging just over 17 million a month in the first half, slowing the industry's post-COVID recovery.
The U.S. auto sales figures fell just below forecasts and rose approximately 5% during the month.
The annualized pace of sales fell to 14.8 million, the data show, near the low end of forecasts -- 14.7 million to 15 million -- after averaging just over 17 million a month in the first half, slowing the industry's post-COVID recovery. It's the lowest SAAR reading since July 2020 (14.6 million), when the industry was steadily rebounding from COVID-19 shutdowns, noted analysts.
Toyota Motor Corp., Hyundai, Kia, Mazda and Volvo all reported another month of solid, double-digit U.S. sales gains in July, even as inventories continue to fall broadly across the industry, because of severe microchip shortages and other supply-chain disruptions in the wake of the pandemic.
Ford particularly felt the pinch in the supply chain, with its sales down nearly a third. A Ford spokesman said the company ended last month with gross new-vehicle inventories of 160,000, a 67% decline from 490,000 at the end of July 2020.
NAFCU Analysis
“Vehicle sales continued their slide in July, driven primarily by lack of supply. With an economy in recovery, the macroeconomic factors exist for very strong sales, but unfortunately supply is not cooperating,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Dealers are being stingier with incentives and manufacturers are using their limited semiconductor supply on the most profitable vehicles. The shortage is so acute that U.S. auto production fell to its lowest level in 30 years. Unmet demand in the new vehicle market has propelled used car prices upward at a rapid pace in 2021, but the latest data from Manheim suggests some modest softening over the past two months.
“Experts anticipate the production snags will persist into early 2022, which will continue to weigh on sales,” added Long.