General Motors announced a sharp drop in third-quarter US sales on Friday as the global semiconductor crunch depletes dealerships of auto supply in the midst of still-solid customer demand.
The large US automaker depicted auto inventories as “historically low” after months of restricted semiconductor supply, which has prompted manufacturing blackouts and cuts all through its plant network.
GM announced third-quarter sales of 446,997 in the United States, down very nearly a third from the year-ago period.
In the latest quarter, the chip lack was exacerbated by a surge in Covid-19 cases in Malaysia, which is home to key semiconductor capacity.
Yet, Steve Carlisle, executive VP of GM North America, said the issues with chips “are improving” and that it anticipates a “more stable operating environment through the fall.”
One potential gain of the supply crunch for automakers has been rising vehicle costs, which can assist with offset some of the pain from lower sales.
In the second from last quarter, GM’s average vehicle costs was $47,467, up just about 32% from the same period in 2018.
“While supply has been constraining sales in recent months, underlying demand conditions remain strong, thanks to ample job openings, growing pent-up vehicle demand and excess savings accumulated by many households during the pandemic,” said GM Chief Economist Elaine Buckberg.
“We expect to continue selling every vehicle we can produce with rapid turnover.”
Shares of GM fell 0.2 percent to $52.63 in morning trading.