Auto makers fresh off heady sales and profits in the first quarter are preparing for a rough ride ahead, as the global computer-chip shortage clouds an otherwise ripe environment for car sales.
General Motors Co. on Wednesday reported a near-record operating profit for the January-March period while rival Ford Motor Co. a week earlier posted its best bottom line in years. Jeep-maker Stellantis NV said sales rose 14% for the quarter and confirmed earlier full-year guidance of 5.5% to 7.5% adjusted operating margins. It reports half-year earnings results in August.
But each company said the shortage of semiconductors that has forced production cuts across car factories world-wide since January will pinch production and inventories even more heading into the summer, just as American car buyers are turning out to dealerships in droves.
That means car shoppers in the coming months are likely to find slimmer options and fewer deals, from new and used dealerships to the rental-car lot.
The auto industry’s inventory crunch has produced a favorable knock-on effect: record pricing. Dealers and car companies are working with such thin inventory that they have been able to withhold the generous discounts and promotions they normally dangle to entice shoppers.
