New Car Sales Keep Dropping Because There Just Aren’t Enough Cars
With a shortage of fresh inventory, some automakers have seen sales figures drop over 50% compared to the same time last year.
Supply chain issues stemming from the COVID-19 pandemic have hit the auto industry hard, with little sign of the issues abating any time soon. The latest May sales figures from automakers are trickling in and the numbers look bleak, as reported by Automotive News.
Toyota is normally a star performer when it comes to US sales, but the company has faced major headwinds as it struggles to build enough cars to meet demand. Sales were down 27% over May 2021, dropping to just 175,990 over the past month. It marks the tenth straight month of decline for Toyota's US sales.
RAV4 sales were up 9.5% this month, but the rest of Toyota's star models dropped off. Camry volumes were down 34% while the Highlander and Tacoma dropped by 46% and 31% respectively. Meanwhile, Lexus has also been on the downswing for the last four months running, posting a 17% decline relative to its numbers in May last year.
Honda has posted an even steeper decline. Inventory turnover rates hit a record high of 80% as the company simply can't deliver enough vehicles to meet demand. Deliveries were down 57.3% compared to May 2021, with the company shifting just 75,491 vehicles. Over half of Civics and CR-Vs are being sold prior to arrival at dealers amidst the difficult trading conditions.
Acura slumped even further, 64% down on last year as it shifted just 6,460 cars in May. The brand is holding on to a positive outlook, though, with strong interest in the upcoming Integra launch providing hope for the future. Rounding out the big names from Japan, both Subaru and Mazda saw declines as well, of 25% and 64% respectively.
Neither were Korean manufacturers spared. Hyundai's deliveries dropped by 34% down to 59,432 cars. The company has recorded zero fleet sales for the fifth month running as it focuses on retail sales. Hyundai dealers have just 18,641 vehicles in stock as of May 31, compared to 91,249 at the same time last year.
It's a sign of just how constrained inventory is right now, and how that's impacting sales. Kia posted similar figures of 57,941 deliveries in May, down 28% year-on-year. The company's stock levels are similarly low, sitting at just 9,000 cars, a full 30,000 lower than May 2021.
Genesis is perhaps the one outlier, posting an 18% increase in deliveries relative to May 2021. The luxury arm of Hyundai shifted 4,400 vehicles, on the back of increased sales of the fresh G70 and GV70 models.
While not every automaker posts monthly sales results, it's clear enough from the statistics available that the industry is suffering badly from a lack of supply. Total sales for May are expected to be down by around 17 to 28% compared to the 1.59 million vehicles sold in May 2021.
Wait times for new cars still stretch from months to years as the chip shortage rolls on, and the world is now feeling the ongoing effects of a pandemic and a major war at the same time. Until things calm down, expect supply to remain tight, prices to remain high, and sales to remain lower than usual.
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