On May 27, 2021, a Totota dealership is visible in Annapolis, Maryland, as many car dealerships around the country are running low on new vehicles due to a computer chip shortage that has caused numerous vehicle manufacturers’ manufacturing to practically halt. Getty Images | Jim Watson | AFP DETROIT (AP) — New car sales in the United States are still strong, but they are slowing due to fears about inflation and a global shortage of semiconductor chips, which continues to crimp auto production and dealer inventories. Analysts predict that automakers sold around 4.5 million automobiles in the second quarter in the United States, up 52 percent to 53 percent from a year earlier, when the coronavirus epidemic forced Americans to shelter-in-place and forced auto showrooms to close temporarily. Except for Ford, which is anticipated to reveal its figures on Friday, most major automakers report June and second-quarter sales data on Thursday. While the rebound from the depths of the coronavirus pandemic has been excellent, sales are declining this year. According to Deutsche Bank analyst Emmanuel Rosner, sales in June would be 15.7 million automobiles, down from 17.1 million in May and 18.6 million in April. The monthly sales pace indicates how many automobiles the industry would sell in a year if it sold the same number of cars every month. It’s a key indicator of the strength of the industry and consumer demand. “The sales slowdown is more likely due to a lack of availability on dealer lots than a drop in consumer demand as automakers struggle to replenish dealer inventories with top models, particularly SUVs and pickup trucks,” Rosner wrote in an investor note ahead of the release of June and second-quarter sales data on Thursday. According to auto research firms Cox Automotive and Edmunds, sales for every major automaker are predicted to increase by double digits in the second quarter compared to the same period last year. However, they are only marginally higher than the second quarter of 2019. Due to restricted supplies from the global chip shortage and stronger-than-anticipated consumer demand throughout the coronavirus pandemic, new vehicle sales prices are not likely to slow down. According to J.D. Power and LMC Automotive, the average transaction price for a new vehicle in June will set a new high of $40,206. According to the firms, the previous high for any month was $38,539 in May 2021. Higher prices have resulted in higher profits for manufacturers and merchants, but they have also fuelled inflation fears. Consumer spending on new vehicles is forecast to hit a new high of $149.7 billion in the second quarter, up 60.7 percent from 2020 and 27.9% from 2019. “Despite inventory problems limiting the number of vehicles sold to consumers, there is no doubt about the strength of consumer demand. Despite fewer discounts, consumers are buying more expensive automobiles, boosting the profitability of those sales for both manufacturers and merchants “In a statement, Thomas King, president of J.D. Power’s statistics and analytics group, said – Michael Bloom of CNBC contributed to this report./n
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