An analysis of U.S. auto sales and the economy during Q2 of 2021 just released by NADA show just a modest increase in sales compared to Q1. They totaled a 17.0-million-unit SAAR, up slightly from the 16.9-million-unit SAAR in the first quarter of 2021. (Inventory Deficit Hurts June US Vehicle Sales. Again)
During the second quarter, light-trucks, crossovers and sport utility vehicles (SUVs), were 76.9% of all new vehicles sold. The segment is expected to continue to move towards an 80% market share. Pickups accounted for 17.6% of sales for the first half of 2021, down from 20.0% compared to the first half of 2020; crossovers represented 45.9% of sales, up from 41.8% one year ago.
“Inventory, due primarily to a global microchip shortage, remains a major factor in all facets of the auto retail industry. As of June 28, 2021, 4.6 million vehicles have not been produced globally as a result of the chip shortage and an additional 1.2 million losses are projected for a total of 5.8 million vehicles not produced, per Auto Forecast Solutions. In North America alone, 1.5 million vehicle losses have been announced with an additional 300,000 projected for a total of 1.8 million units,” said Patrick Manzi, NADA Chief Economist.
AutoInformed notes here that the chip shortage is just one negative result of the idiocy of Trump’s trade policy that used unpredictable tariffs that actual cost American manufacturing jobs and prevented companies from shifting production here or starting production in the U.S.
Because of strong demand in the booming Biden Administration economy with a small supply of vehicle inventory, new-vehicle average transaction prices reached record highs at the end of second quarter with many vehicles selling at MSRP or higher. In June 2021, the new-vehicle average transaction price is expected to reach a record high of $40,206, according to J.D. Power.
Real GDP in Q2 of 2021 is expected to grow by 8.6% on an annualized basis. The U.S. economy is predicted to return to its pre-COVID Trump Administration disaster level of ~ $19.2 trillion by the time final data is collected. For all of 2021, real GDP is expected to increase by around 7%. Initial jobless claims continue to fall each week and are headed toward pre-pandemic levels. About 14.7 million Americans continue to receive at least some type of unemployment benefits, down 54% compared to the same period in 2020 when Trump ruled.
“In June, the labor market surpassed expectations by adding 850,000 jobs. The U.S. labor market has added back roughly 70% of the jobs lost due to the coronavirus pandemic, but an estimated 6.8 million jobs have not yet been recovered. At franchised new-car dealerships, employment has improved; at the end of May 2021, franchised dealership employment was 1.08 million workers. Like many other industries, some dealerships have struggled to find workers to fill roles due to strong labor demand nationwide,” said Manzi.
Inventory levels were just over 1.5 million units at the end of May, which 25 days of supply, down from 2.6 million units and a more normal – in conventional thinking – 61 days of supply at the end of May 2020. According to Wards Intelligence, inventory at the end of June was depleted further and fell to 1.4 million units. By the end of the July, inventory is expected to fall an additional 7% to 1.3 million units. AutoInformed sees big opportunities here to shift from the old paradigm toward a faster, leaner sales and marketing model.
“Inventory is likely to be tight into 2022 as manufacturers continue to deal with the impact of the chip shortage for the remainder of the year,” said Manzi. “Even if there is enough production to satiate current retail demand, there are still plenty of fleet customers looking for inventory whose needs will need to be met before manufacturers can begin to restock dealer lots to more normal levels closer to three million units.”
2021 Q2 US Sales – Light-Trucks, Crossovers, SUVs Rule
An analysis of U.S. auto sales and the economy during Q2 of 2021 just released by NADA show just a modest increase in sales compared to Q1. They totaled a 17.0-million-unit SAAR, up slightly from the 16.9-million-unit SAAR in the first quarter of 2021. (Inventory Deficit Hurts June US Vehicle Sales. Again)
During the second quarter, light-trucks, crossovers and sport utility vehicles (SUVs), were 76.9% of all new vehicles sold. The segment is expected to continue to move towards an 80% market share. Pickups accounted for 17.6% of sales for the first half of 2021, down from 20.0% compared to the first half of 2020; crossovers represented 45.9% of sales, up from 41.8% one year ago.
“Inventory, due primarily to a global microchip shortage, remains a major factor in all facets of the auto retail industry. As of June 28, 2021, 4.6 million vehicles have not been produced globally as a result of the chip shortage and an additional 1.2 million losses are projected for a total of 5.8 million vehicles not produced, per Auto Forecast Solutions. In North America alone, 1.5 million vehicle losses have been announced with an additional 300,000 projected for a total of 1.8 million units,” said Patrick Manzi, NADA Chief Economist.
AutoInformed notes here that the chip shortage is just one negative result of the idiocy of Trump’s trade policy that used unpredictable tariffs that actual cost American manufacturing jobs and prevented companies from shifting production here or starting production in the U.S.
Because of strong demand in the booming Biden Administration economy with a small supply of vehicle inventory, new-vehicle average transaction prices reached record highs at the end of second quarter with many vehicles selling at MSRP or higher. In June 2021, the new-vehicle average transaction price is expected to reach a record high of $40,206, according to J.D. Power.
Real GDP in Q2 of 2021 is expected to grow by 8.6% on an annualized basis. The U.S. economy is predicted to return to its pre-COVID Trump Administration disaster level of ~ $19.2 trillion by the time final data is collected. For all of 2021, real GDP is expected to increase by around 7%. Initial jobless claims continue to fall each week and are headed toward pre-pandemic levels. About 14.7 million Americans continue to receive at least some type of unemployment benefits, down 54% compared to the same period in 2020 when Trump ruled.
“In June, the labor market surpassed expectations by adding 850,000 jobs. The U.S. labor market has added back roughly 70% of the jobs lost due to the coronavirus pandemic, but an estimated 6.8 million jobs have not yet been recovered. At franchised new-car dealerships, employment has improved; at the end of May 2021, franchised dealership employment was 1.08 million workers. Like many other industries, some dealerships have struggled to find workers to fill roles due to strong labor demand nationwide,” said Manzi.
Inventory levels were just over 1.5 million units at the end of May, which 25 days of supply, down from 2.6 million units and a more normal – in conventional thinking – 61 days of supply at the end of May 2020. According to Wards Intelligence, inventory at the end of June was depleted further and fell to 1.4 million units. By the end of the July, inventory is expected to fall an additional 7% to 1.3 million units. AutoInformed sees big opportunities here to shift from the old paradigm toward a faster, leaner sales and marketing model.
“Inventory is likely to be tight into 2022 as manufacturers continue to deal with the impact of the chip shortage for the remainder of the year,” said Manzi. “Even if there is enough production to satiate current retail demand, there are still plenty of fleet customers looking for inventory whose needs will need to be met before manufacturers can begin to restock dealer lots to more normal levels closer to three million units.”