New-car sales plunge: Supply constraints and rising prices limit buyers
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U.S. auto sales dropped sharply in the second quarter, according to estimates, as automakers continue to deal with supply chain problems, declining consumer sentiment and rising interest rates.
Why it matters: The auto industry remains a significant engine of the U.S. economy — and a decline in sales may portend a broader pullback in consumer spending.
By the numbers: All but one of the major automakers posted double-digit sales declines in the second quarter, according to estimates by car-research site Edmunds. Automakers will release official second-quarter figures beginning Friday.
- Yes, but: Automakers are enjoying strong profits on a per-vehicle basis, Autotrader analyst Michelle Krebs tells Axios.
Between the lines: The global semiconductor chip shortage continues to restrict production capacity, limiting supplies of new cars, trucks and SUVs. Automakers have prioritized higher-profit models, Krebs says.
- McKinsey predicted earlier this month that the chip shortage would last three to five years.
Be smart: Sky-high prices — now averaging more than $47,000, according to Kelley Blue Book — are also hurting sales, driving more buyers into the used market.
- Edmunds reported on Thursday that more than 1 in 9 new-car borrowers in June agreed to monthly payments of $1,000 or more.
(Editor's note: Cox Enterprises, owner of Autotrader and Kelley Blue Book, is an investor in Axios.)
