The US’ retail sales of new vehicles are expected to decline by 14.3pc in August to 987,000 units from the same year-ago month, as domestic dealerships feel pressurized amid the ongoing semi-conductor chip shortage and the latest Delta-variant outbreak.
Automobile consultants have also estimated a two million units drop in light vehicle sales worldwide for this year to 83.8 million, as manufacturers continue to suspend plant activity.
Volkswagen’s SEAT line-up shut its plant for two days this week and Volvo’s Gothenburg unit was idled once in August and another due next week up to Sep 3. Toyota, Ford, and Nissan also announced operations suspensions in mid-August.
The global chips shortfall and prevailing COVID-19 cases have affected South American operations as well. Brazil’s Anfavea noted in early August that while output climbed 45.8pc between January and July, production slowed down by 4.2pc in July, making it the second successive month of subdued operations.
Inventory levels and other supply chain issues are unlikely to ebb in the near term noted media reports on Aug 26. Moreover, market reports on Monday have forecasted a 6.3-7.1 million drop in global production volumes that may spill over into 2022.
As consumer demand continues to grow, automakers are dealing with unfinished assembly lines as they wait for parts to arrive. This cycle is trickling down to dealerships that have empty warehouses, with stock levels down to a mere 942,000 compared to three million during the pre-pandemic period of 2019.