Ford’s US sales fall 33% as chip shortages ravage auto industry

DETROIT — US sales of Ford Motor’s new vehicles last month fell 33.1% from a year ago, the company said Thursday, due to a global shortage of semiconductor chips wreaking havoc on the automotive industry.

The Detroit automaker’s sales kicked off a disappointing month of US auto sales in August, falling to an adjusted sales rate of 13.09 million vehicles. This is 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 expect sales in August to be between 13.1 million and 14.4 million vehicles, with JD Power and LMC Automotive forecasting a 13.7% decline in overall sales compared to August 2020.

Sales momentum for any given month measures how many cars an industry would sell if it sold the same amount each month. It is the main barometer of the health and demand of the industry.

August has historically been one of the high auto sales months of the year, but chip shortages have led to low vehicle inventory levels and skyrocketing prices for new cars and trucks.

The Ford Company logo is displayed on a sign outside the Chicago Assembly Plant on February 03, 2021 in Chicago, Illinois.

Scott Olson | Getty Images

According to Thomas King, president of the data and analytics division at JD Power, dealers have only 942,000 vehicles in inventory for retail sale, compared to about 3 million before the coronavirus pandemic two years ago.

King said, “Although dealers have inventory coming in daily, it is simply replacing the vehicles being sold, preventing dealers from growing inventory to the level needed to support a high sales momentum.” “

While most major US automakers have switched to quarterly sales reporting, many 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 modest sales growth or loss compared to a year ago.

Sales for nearly every vehicle in Ford’s lineup were down last month compared to the previous year, with some increasing sales from new vehicles such as the Bronco SUV. Notably, Ford’s best-selling F-Series pickup declined 22.5%.

Ford’s total sales last month topped 124,176 vehicles. Truck sales declined by about 30% since August 2020, while SUV sales declined by 25.3% and car sales by 86%.

According to Andrew Frick, vice president of Ford Sales US and Canada, a silver lining for Ford last month was that its retail sales increased by 6.5% compared to July, but were still down 33% from August 2020.

Ford’s sale came 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 an ongoing global shortage of semiconductor chips.

The shortage originated early last year when Covid shut down vehicle assembly plants. As facilities closed, wafer and chip suppliers turned parts to other sectors such as consumer electronics, which were not expected to be hurt as much 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.

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