Car sales in the U.S. were up dramatically in April over numbers from one year ago. But that performance is tempered by the knowledge that April 2020 was the height of the COVID-19 lockdown. More significant is that sales beat expectations, even as a global microchip shortage promises to cut the number of cars on dealership lots.
Some manufacturers have not reported sales figures for the month, but there are some remarkable stories among those that have. Honda sales were up more than 165% over figures from April 2020, with sales at its Acura luxury brand up more than 225%. Toyota sales jumped 183%. Genesis, the luxury marque of South Korea’s Hyundai, saw its total increase by 308%.
Year-to-date increases are more subdued but still show a market speeding up:
- Ford up 13%
- Honda up 40%
- Hyundai up 48%
- Kia up 35%
- Mazda up 45%
- Subaru up 38%
- Toyota up 45%
- Volvo up 63%
The numbers come with a stark warning, though — the supply of new cars is starting to run low, mostly due to the global semiconductor shortage.
Cox Automotive Senior Economist Charlie Chesbrough has warned that recent analysis of inventory levels suggests days’ supply for the entire industry “could drop into the mid-30s, an unheard-of low number but possible under current conditions.” (Cox Automotive is the parent company of Kelley Blue Book).
No Slack in Demand
There are no signs of demand abating. “Given the showroom traffic our dealers are reporting ahead of the summer opening of the country we are confident our strong performance will continue through the year,” Sean Yoon, CEO of Kia Motors America, said in a statement.
But “the market is being driven by inventory right now, not incentives, and it is only getting worse as the chip shortage continues,” warned Cox Automotive Senior Director of New-Vehicle Sales Strategy Brian Finkelmeyer. “Most dealers are scrambling to secure inventory in any way they can.”
Supply issues will likely get worse before they get better. Ford, for example, cut its worldwide production by 17% in the first quarter of the year. But the company recently warned investors that the ongoing microchip shortage could cut second-quarter production in half.
