Overall, U.S. light-vehicle sales bounced back in the second quarter from a year earlier, when pandemic restrictions pummeled spring sales. Sales climbed by half in the quarter, to 4.3 million, among auto makers that reported results last week, according to the Automotive News Research & Data Center. Mercedes-Benz and Jaguar Land Rover are expected to report their results this week.
But the industry's seasonally adjusted, annualized selling rate declined significantly for a second consecutive month. The SAAR fell from more than 18 million in March and April to 17.1 million in May and 15.35 million in June, according to Motor Intelligence.
Some dealers have called the chip shortage the best of times. But the tide could soon change as the crisis continues to deplete stocks.
"It's going to be a pretty challenging Q3," Tyson Jominy, vice president for data and analytics at J.D. Power, told Automotive News. By the end of June, "the sales pace was starting to slip away, and the effects of the inventory are starting to catch up with us."
By the end of last week, the shortage had cut more than 4.9 million vehicles from production schedules this year, according to AutoForecast Solutions. More than 1.5 million vehicles have gone unbuilt in North America.
"We're in this middle ground right now," said Kevin Roberts, director of industry insights and analytics for CarGurus. "We're improving from where we were with COVID, but we're not able to really hit that full sales volume level due to the ongoing inventory crunch."
Dealers have cashed in on the slim-inventory, high-customer-demand equation, scoring record profits without the need to discount the few vehicles they have in stock. The industry's average new vehicle transaction price grew to a record $40,206 in June, according to J.D. Power. That's nearly $1,700 more than the previous record set just a month ago. Meanwhile, it said average incentive spending per vehicle in June fell an estimated 43 percent from a year earlier to $2,492.
The effect of the chip crisis has varied by auto maker, with many import brands faring better than the Detroit 3.
Nissan's second-quarter sales soared 71 percent, but new-vehicle availability will hit its lowest point this summer, said Judy Wheeler, Nissan division vice president of sales and regional operations in the U.S. Nissan dealers' average supply at the beginning of June was 43 days, according to Cox Automotive estimates.
"In September, we are expecting to be back to full production," Wheeler said. "I hope it sticks that way."
Hyundai Motor America has also been less hampered by the shortage. "I do a lot of traveling and I have yet to see a completely empty lot," said Randy Parker, senior vice president of national sales.
But the auto maker isn't immune to the disruption happening in the supply chain, he added. "We try to prioritize what we can and cannot build, when we can build it, what trim levels we look at," he said.
GM, Ford Motor Co. and Stellantis have fared far worse. GM has had to cancel production of more than 250,000 vehicles, but only 1 percent of those losses were lucrative full-size pickups and SUVs, according to LMC Automotive. Stellantis lost almost 200,000 vehicles, and 13 percent were full-size light trucks, according to LMC. Second-quarter sales for both GM and Stellantis rose more than 30 percent from a year earlier.
Ford sales rose 9.2 percent in the second quarter, including a 27 percent drop in June. Ford last week extended shutdowns or temporarily cut shifts at plants that make the Explorer, F-Series, Transit, Bronco Sport, Edge and Escape.
Ford plants ran at just 55 percent of capacity through May this year, resulting in more than 350,000 vehicles lost, 37 percent of which were full-size trucks, according to LMC.
Ford has been offering customers $1,000 off if they place an order for a vehicle to be built later. The strategy has led to a 16-fold increase in retail orders vs. a year earlier, Andrew Frick, vice president of Ford sales in the U.S. and Canada, said in a statement.
But those deliveries won't come all at once, and dealers need more inventory today, said Greg Loudon, owner of Loudon Motors Ford in Minerva, Ohio. "All I see is a lot of dealers that have a monster to feed, and they've got no inventory," he said. "I'm going to just keep my feet dipped in the used-car business."
In Miami, Zinn said Warren Henry can survive on limited inventory. Most vehicles are sold before they arrive, and he expects profitability to remain strong as the group leans on fixed operations and used-vehicle sales.
But with new-vehicle days' supply creeping into the single digits at some stores, one kink can rattle a dealer's entire month. "When inventory is this tight and you have a recall or something along those lines, it totally throws everything off," Zinn said. "There's no room for error."
David Muller, Laurence Iliff and Urvaksh Karkaria contributed to this report.