Chip shortage keeps driving up auto prices, cutting sales

U.S. new vehicle sales tumbled more than 21% in the second quarter compared with a year ago as the global semiconductor shortage continued to cause production problems for the industry.

Yet demand still outstripped supply from April through June, even with $5 per gallon gasoline, high inflation and rising interest rates. The low supply has raised prices to record levels, knocking many consumers out of the newvehicle market.

Edmunds.com said that automakers sold 3.49 million vehicles during the quarter, nearly 933,000 fewer than the same period last year.

J.D. Power estimates that the average sales price of a new vehicle for the first six months of the year hit nearly $45,000, a record that is 17.5% higher than a year ago. Edmunds. com reported that 12.7% of consumers who financed a new vehicle in June had monthly payments of $1,000 or more.

At General Motors, which reported a 15% sales drop, shortages of chips and other parts forced the company to build 95,000 vehicles without one part or another. The incomplete vehicles are expected to be finished and sold by the end of the year.

Jack Hollis, head of Toyota sales in North America, said the chip shortage didn't improve as much as the company expected in the first half of the year, and he doesn't see it getting much better until next summer.

“Every microchip producer is producing at maximum speed because they have maximum demand,” Hollis said. “There is no catching up going on. It's actually falling behind.”

Toyota sales were down 19% for the first half of the year and they fell 18% in June. That allowed GM to pass the Japanese company and retake the crown as the top-selling automaker in the U.S., a title GM lost last year.

Stellantis, formerly Fiat Chrysler, posted a 16% sales decline. Honda's second-quarter sales fell by more than half, with the company blaming “severe” supply chain issues. Nissan