U.S. auto sales will fall to 1.1 million units in October, down 17.2 percent from the same period in 2020 and 19 percent from the same period in 2019, due to chip shortages and demand for new vehicles, according to a joint forecast released by J.D. Power and other companies on Oct. 27. The forecasts are based on results from US dealers for the first three weeks of October.
However, Cox's forecast for U.S. October sales was even lower, at 950,000 units, which would be the lowest October sales since 2010. In 2010, auto sales were still struggling to recover from the financial crisis.
Analysts said it would be the third consecutive month that US sales have been lower than a year ago and the sixth consecutive month of declines on a seasonally adjusted annualised basis.
In early October, the National Automobile Dealers Association lowered its forecast for 2021 U.S. auto sales to 15.2 million vehicles from 16.5 million.
For consumers, new cars are in short supply, leading to higher prices and waiting lists for many popular models, analysts said.
The shortage of new cars is the biggest problem. At the end of October, analysts at J.D. Power and other firms expect U.S. dealers to hold below 1 million vehicles in stock for a third straight month, or less than the number of vehicles sold in the U.S. in a single month. But based on past data, the benchmark for inventory should be 60 days of sales.
A shortage of new cars also means cars are selling fast. The average number of days a new car spent at dealerships fell to 20 days in October, a record low. That's down from 23 days in September and 49 in the same period last year, according to analysts including J.D. Power.
On Oct. 27, GM said during its third-quarter earnings call that its U.S. dealerships had just 129,000 vehicles in stock as of Sept. 30, down from 492,000 a year earlier.
Gm chief Financial Officer Paul Jacobson said while gm does not expect inventories to return to desired levels anytime soon, the automaker still expects its fourth-quarter sales to improve from the third quarter. In the fourth quarter, GM expects to complete cars that have been largely assembled but lack chips.
"Gm's inventory is currently about 125,000 vehicles, and we expect it to remain at a low level, possibly through 2022," he added.
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