Saturday, January 28, 2023

USA: car sales fell by 8% due to supply problems

Shortages of computer chips and other auto parts continued to plague the US auto industry last year, with vehicle sales expected to fall 8% through 2021 to their lowest level in more than a decade.

Automakers reported Wednesday that they sold 13.9 million cars, trucks and vans last year as reduced factory output limited production amid high demand for new vehicles. This was the lowest sales figure since 2011, when the economy was recovering from the Great Recession.

But sales rose slightly in the fourth quarter and inventories increased as parts supplies improved enough that production rose slightly. Analysts are now expecting sales to rise by about a million units to 14.8 million this year, as demand remains strong. But they will still be a long way from the pre-coronavirus pandemic normal of 17 million.

With many models still in short supply, the average price of a new vehicle rose 2.5% to a record high of $46,000 in December, according to JD Power.

The shortage of computer chips dates back to early 2020, when automakers were forced to shut down their factories due to a rapid rise in COVID-19 cases. Chip makers focused production on consumer electronics to boost computer and video game sales due to people staying at home. When car factories were back up and running ahead of schedule, chip makers weren’t making as many semiconductors for cars, which must be built to withstand extreme temperatures and vibrations.

Car chip production has improved but has not yet returned to pre-pandemic levels, so car factories have not yet returned to full capacity.

As a result, the 13.9 million vehicles sold in the United States last year were 1.2 million fewer than those sold in 2021, according to

Nation World News Desk
Nation World News Desk
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