Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Ford F-150 pickup trucks for sale at a dealership in Colma, Calif. (Photo: David Paul Morris/Bloomberg via Getty Images)

Carmakers saw gangbuster sales in March, boosted by consumers' $1,400 stimulus checks, but analysts warned of volatility ahead as production troubles mount.

Why it matters: Car prices are rising because of inventory shortages, and as the spring selling season begins and consumer sentiment improves, it could be harder for shoppers to find the vehicle they want at an affordable price.

Driving the news: Automakers reported strong demand in March, and forecasters say they expect overall first-quarter sales to rise about 8 percent over a pandemic-wracked early 2020, Automotive News reported.

  • Toyota, Honda, Kia and Hyundai were among those reporting strong sales in March.
  • "The first quarter ended strong, setting the market up for an incredible spring from a demand perspective," said Jonathan Smoke, chief economist at Cox Automotive.
  • Stimulus payments, tax refunds, vaccination progress and warmer weather are all helping to boost consumer sentiment, he said.
  • "All those things are coming together right now, and the industry would likely be setting all-time sales records if it were not for tight supplies and elevated prices."

What's happening: After two months of factory shutdowns early in the pandemic, the industry is now getting hit with shortages of key components, notably computer chips that power vehicle electronics.

  • The chip shortage has snowballed into a bigger crisis, with multiple factories temporarily closed, said Jessica Caldwell, Edmunds’ executive director of insights.
  • "We’re seeing the industry being hit hard on both sides: Retail customers are being offered fewer choices and paying higher prices, while fleet customers are likely seeing their orders delayed."

By the numbers: New vehicle inventory on sale at dealerships is down by 36% in March 2021 compared with a year ago, according to Edmunds.

  • The average transaction price for new vehicles in March was estimated to be $40,563, versus $38,601 a year ago.
  • Used vehicles sold for an estimated $22,663, on average, up from $20,273 last year.

Trucks and SUVs have been hit the hardest. Although their high profit margins have been a bright spot for automakers during the pandemic, supplies are running low because of the chip shortage.

  • Truck inventory was down by 60% in March compared to a year ago, per Edmunds.
  • The average transaction price for a new full-size pickup is estimated at $54,763 compared to $51,164 a year ago.

The bottom line: It's a basic issue of supply and demand.

Go deeper

In photos: Long lines and fuel shortages amid Colonial Pipeline shutdown

A sign warns consumers on the avaliability of gasoline at a RaceTrac gas station in Smyrna, Georgia, on May 11. The average national price of gasoline has risen to $2.985 a gallon, Bloomberg notes. Photo: Elijah Nouvelage/AFP via Getty Images

Reports of fuel shortages across the U.S. emerged on Tuesday as the national average for gasoline prices soared to its highest level since 2014 amid a key fuel pipeline shut down, per Bloomberg.

What's happening: Operator Colonial Pipeline aims to have service restored by the week's end following last Friday's ransomware attack that shut down some 5,500 miles of pipeline from Texas to New Jersey. Florida Gov. Ron DeSantis (R) declared a state of emergency after panic-buying created a fuel shortage.

Reports: More than 100 Republicans threaten to form 3rd party over Trump

Former President Trump addressing the Conservative Political Action Conference in Orlando, Florida, in February. Photo: Joe Raedle/Getty Images

More than 100 Republicans will sign a letter Thursday threatening to create a third party if the GOP doesn't "break" with former President Trump, Reuters first reported.

Why it matters: Per Axios' Mike Allen and Jim VandeHei, Trump's grip on the GOP has gotten stronger since the Jan. 6 Capitol riot. The Republican Party's "allegiance to Trump" as he continues to make false claims about his 2020 election loss has "dismayed" the group, according to Reuters.

Updated 2 hours ago - World

In photos: Dozens dead as Israel and Hamas intensify aerial bombardments

People gather at the site of a collapsed building in the aftermath of Israeli air strikes on Gaza City on May 11. Photo: Mahmud Hams / AFP) (Photo by MAHMUD HAMS/AFP via Getty Images

At least 35 Palestinians and five Israelis have been killed as fighting between Israel's military and Hamas entered a third day, per Reuters.

The big picture: The worst aerial exchanges of fire between Israel and Hamas since 2014 come after escalating violence in Jerusalem that injured hundreds of Palestinians and several Israeli police officers during protests over the planned evictions of Palestinian families from their homes.