Carmakers reported higher sales in the US during the first quarter on Thursday amid rising consumer confidence, but a semiconductor shortage that has put pressure on production raises questions about supply in the coming months.
Toyota led the package with its double-digit sales profit in the United States from year to year, but General Motors, Ford and Fiat Chrysler also saw sales increase during a period that included the passage of a giant US economic relief package that sent cash to most households and accelerated vaccinations.
“Consumer confidence and spending will continue to increase due to stimuli, rising vaccination levels and the gradual recovery of the economy,” said GM chief economist Elaine Buckberg. “Automatic demand should remain strong throughout the year.”
But even if demand is healthy, there are questions about the supply picture as all four companies have announced production cuts due to the global semiconductor shortage.
Just a week ago, FCA’s parent company Stellantis announced that it was suspending production at five North American car factories due to the chip crisis.
Toyota increased sales by 21.6 percent during the first three months of the year to 603,066.
That included an increase in sales of “alternative motor vehicles” including hybrids and electric cars, which now account for 24 percent of total sales, Toyota says.
GM, the largest American carmaker, showed a sales profit of four percent to 642,250. The company pointed to a strong demand for larger vehicles such as full-size sports vehicles (SUVs) and pickup trucks.
Ford sales increased only one percent to 521,334, as higher sales of trucks and SUVs more than offset a sharp decline in sedan sales.
Ford also highlighted higher electric car sales after the rollout of its Mustang Mach-E SUV.
At the same time, the FCA said sales rose five percent to 469,651, driven in part by profits in the Ram and Jeep truck brands.
Analysts at Cox Automotive said activity increased in March after winter storms slowed sales in February, and the arrival of stimulus checks from President Joe Biden’s economic relief package also increased activity.
But Cox warned that the semiconductor shortage appears to be a threat to the automotive sector.
“Although lean stocks have not had a major impact on buyers in the first quarter, it is likely to change as we enter Q2,” said Cox Automotive economist Charlie Chesbrough.
“The production disruptions that are happening now will be even lower stocks in the coming months.”
GM said inventories at the end of the quarter amounted to 334,628, well below the level at the end of the fourth quarter and a 50 percent decrease from supply a year ago.
Due to the chip shortage, “GM builds certain vehicles without certain modules when needed,” the company says. “They will be completed as soon as more semiconductors become available.”
The Detroit giant aims to regain lost production in the second half of the year.
GM was the only one of the four car manufacturers to submit inventory data along with its sales report.