The chip shortage has not been equally harsh on every automaker, with some, like Toyota, seemingly hurt less than others, like GM. GM said Friday that the shortage has really, really hurt, with sales for the third-quarter down 33 percent year-over-year.
When the dust settles at the end of the year, this could be GM’s worst sales year in decades.
1958! GM tried to put a positive spin on things.
“The semiconductor supply disruptions that impacted our third-quarter wholesale and customer deliveries are improving,” said Steve Carlisle, executive vice president and president, GM North America. “As we look to the fourth quarter, a steady flow of vehicles held at plants will continue to be released to dealers, we are restarting production at key crossover and car plants, and we look forward to a more stable operating environment through the fall.”
GM also said that its financial outlook hasn’t changed; it still thinks it will make up to $13.5 billion this year, which goes to show you that high volume in the auto industry isn’t necessarily the ticket to big profit that it once was. It matters what you’re selling, in other words, more than how many, and GM said Friday that big, expensive SUVs like the Cadillac Escalade and Chevy Tahoe were doing well.
GM also said that dealer inventory was 128,757 units, including cars in-transit. That number in the third-quarter of 2019, before the pandemic and the chip shortage, was a whopping 755,633 units. Which illustrates the issue, really, which is that strong demand is there, but there simply aren’t enough cars.
“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,” Elaine Buckberg, GM’s chief economist, said in a statement.
Still, with Toyota now beating GM in sales volume in America year-to-date, all eyes will be on the end of the year to see if it stays that way.