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Ford’s U.S. product sales drop 33% as chip scarcity devastates car field

DETROIT – U.S. sales of Ford Motor’s new motor vehicles past month declined by 33.1% from a 12 months before due to an ongoing world-wide lack of semiconductor chips that’s wreaking havoc on the automotive industry, the corporation stated Thursday.

The Detroit automaker’s revenue capped off a dismal thirty day period of U.S. automobile gross sales in August, which plummeted to an altered selling rate of 13.09 million autos. That is the worst tempo due to the fact June 2020 and down from this year’s peak of 18.5 million in April, according to car knowledge firm Motor Intelligence.

Analysts anticipated the August advertising rate to be amongst 13.1 million to 14.4 million vehicles, with J.D. Power and LMC Automotive forecasting over-all revenue to drop by 13.7% compared to August 2020.

The product sales pace for any provided thirty day period measures how several autos the marketplace would provide for the yr if it bought the similar total just about every thirty day period. It can be a main barometer of the industry’s overall health and need.

August is traditionally one of the better auto sales months of the 12 months, but the chip scarcity has caused car stock degrees to plummet to file lows and pricing of new cars and vans to skyrocket.

The Ford firm emblem is shown on a sign outside the house of the Chicago Assembly Plant on February 03, 2021 in Chicago, Illinois.

Scott Olson | Getty Illustrations or photos

Dealers only have about 942,000 motor vehicles in inventory for retail sale, when compared with approximately 3 million prior to the coronavirus pandemic two several years ago, in accordance to Thomas King, president of the info and analytics division at J.D. Energy.

“Though inventory is arriving at sellers day-to-day, it is merely changing the vehicles staying sold, protecting against dealers from escalating inventories to a level required to assist a larger revenue tempo,” King stated.

While most major U.S. automakers have switched to quarterly sales reporting, quite a few other people that continue to report regular income such as Honda and Subaru also noted double-digit losses in August. Toyota, Volvo and Hyundai and Kia described slight sales increases or losses as opposed with a yr back.

Gross sales of virtually each and every vehicle in Ford’s lineup were being down previous thirty day period when compared with past calendar year, with incremental profits gains from some new cars this kind of as its Bronco SUVs. Most notably, Ford’s finest-selling F-Sequence pickups declined by 22.5%.

Ford’s total income previous month topped 124,176 automobiles. Truck income had been down by approximately 30%, although SUVs had been off by 25.3% and motor vehicle sales fell by 86% from August 2020.

A silver lining for Ford very last month was that its retail income ended up up by 6.5% as opposed to July but still off by 33% from August 2020, in accordance to Andrew Frick, vice president, Ford Sales U.S. and Canada.

Ford’s gross sales occur a working day soon after the automaker confirmed it was the moment yet again cutting manufacturing of its F-150 pickup truck and other remarkably successful autos because of to the ongoing world wide scarcity of semiconductor chips.

The origin of the shortage dates to early final year when Covid induced rolling shutdowns of auto assembly plants. As the services closed, the wafer and chip suppliers diverted the parts to other sectors this kind of as purchaser electronics, which weren’t anticipated to be as damage by continue to be-at-household orders.

The difficulty is envisioned to cost the worldwide automotive field $110 billion in income in 2021, in accordance to consulting agency AlixPartners.