Will Chip Shortage Dethrone GM's Sales Dominance?

Tim Healey
by Tim Healey
will chip shortage dethrone gms sales dominance

Ninety years. That’s the amount of time that General Motors has led the sales charts in the U.S.

That may change this year, according to industry bible Automotive News, because of the ongoing microchip shortage.

Toyota has outsold GM in the U.S. for two consecutive quarters now, despite a September decline of 22 percent as it, too, struggled. Still, it showed a small year-over-year increase through the first three quarters.

Meanwhile, GM had its worst three months since the darkest days of the Great Recession that roiled the industry, especially the Detroit-based automakers, over a decade ago.

GM trails Toyota by about 90,000 light vehicles as it enters the fourth quarter, and it’s seeing volume numbers not seen since the 1950s.

That said, AN also reports that GM execs seem to believe that the worst of the chip crisis occurred during Q3 and has now passed, and the execs also point out that most of the plants that suffered lengthy shutdowns due to the chip shortage during Q3 will be back online in Q4.

On yet the other hand, analysts do think the crisis will continue to linger and bedevil the industry for the rest of the year, and October could be an especially tough month.

From the story:

“There’s probably more downside risk still because of the multitude of issues going on between port problems, transport problems, getting workers in plants, other parts shortages, chips,” said Jeff Schuster, LMC Automotive’s president of the Americas operations and global vehicle forecasting. “We’ve got a pretty long road before the industry gets out of this.”

Among those automakers who reported quarterly numbers last week, the industry was down around 10 percent, thanks to the chip problems. More automakers, including Ford, Jaguar Land Rover, and Mercedes-Benz are set to report sales this week.

LMC, the analyst firm quoted by AN, expects about 15 million sales for light vehicles this year. That’s still an increase over the 14.6 million from 2020. The company sees a number of around 15.7 million for 2022.

Regular industry observers will note that in the heady post-recession boom times, automakers sold about 16 million units in a given year.

With inventory down, dealers are worried more about getting cars to sell than actually selling the inventory they already have.

Toyota, for its part, touts lessons learned a decade ago during the Fukushima disaster as helping it weather the storm.

Again from AN:

“What we learned from the earthquake is we needed to carry more inventory of slow moving parts — and chips were one of the commodities we identified early on,” Carter told Automotive News via email.

Still, the sales race isn’t a foregone conclusion. Toyota tends to have a smaller inventory than GM, and the automaker told AN that it has fewer than 100,000 units either on dealer lots or in transit.

GM, for comparison, has just under 129,000 units out there, but also has five times as many dealers to spread that inventory around to.

Meanwhile, the market often sees a shift towards truck-buying through the fall and winter, and that would likely favor GM, which has a deeper bench of truck models, even in the face of Toyota unveiling a new Tundra. Toyota has also already announced production cuts for October that are not insignificant.

[Image: GM/Chevrolet]

Join the conversation
4 of 76 comments
  • 28-Cars-Later 28-Cars-Later on Oct 05, 2021

    Let's go Brandon!

    • ToolGuy ToolGuy on Oct 05, 2021

      How high would a stack of coins worth $1 trillion be?

  • Speedlaw Speedlaw on Oct 06, 2021

    I only know what I see at my local dealers. GM/Caddy/Corvette Center- a few work trucks in the forecourt, the showroom is artfully assembled with cubicles...no cars. One vette in stock, the trucks out front are used.. Lexus Dealer- Nothing BMW Dealer - has resorted to hard cases in the forecourt from Auction, instead of the creampuff trades normally seen in this affluent area. Jeep/Chryco dealer- nada, a few used trucks, a few auction Kias. May you live in interesting times....

    • FreedMike FreedMike on Oct 06, 2021

      This has put a serious dent in my Sunday-morning car-lot window shopping.

  • Nrd515 I bought an '88 S10 Blazer with the 4.3. We had it 4 years and put just about 48K on it with a bunch of trips to Nebraska and S. Dakota to see relatives. It had a couple of minor issues when new, a piece of trim fell off the first day, and it had a seriously big oil leak soon after we got it. The amazinly tiny starter failed at about 40K, it was fixed under some sort of secret warranty and we got a new Silverado as a loaner. Other than that, and a couple of tires that blew when I ran over some junk on the road, it was a rock. I hated the dash instrumentation, and being built like a gorilla, it was about an inch and a half too narrow for my giant shoulders, but it drove fine, and was my second most trouble free vehicle ever, only beaten by my '82 K5 Blazer, which had zero issues for nearly 50K miles. We sold the S10 to a friend, who had it over 20 years and over 400,000 miles on the original short block! It had a couple of transmissions, a couple of valve jobs, a rear end rebuild at 300K, was stolen and vandalized twice, cut open like a tin can when a diabetic truck driver passed out(We were all impressed at the lack of rust inside the rear quarters at almost 10 years old, and it just went on and on. Ziebart did a good job on that Blazer. All three of his sons learned to drive in it, and it was only sent to the boneyard when the area above the windshield had rusted to the point it was like taking a shower when it rained. He now has a Jeep that he's put a ton of money into. He says he misses the S10's reliablity a lot these days, the Jeep is in the shop a lot.
  • Jeff S Most densely populated areas have emission testing and removing catalytic converters and altering pollution devices will cause your vehicle to fail emission testing which could effect renewing license plates. In less populated areas where emission testing is not done there would probably not be any legal consequences and the converter could either be removed or gutted both without having to buy specific parts for bypassing emissions. Tampering with emission systems would make it harder to resell a vehicle but if you plan on keeping the vehicle and literally running it till the wheels fall off there is not much that can be done if there is no emission testing. I did have a cat removed on a car long before mandatory emission testing and it did get better mpgs and it ran better. Also had a cat gutted on my S-10 which was close to 20 years old which increased performance and efficiency but that was in a state that did not require emission testing just that reformulated gas be sold during the Summer months. I would probably not do it again because after market converters are not that expensive on older S-10s compared to many of the newer vehicles. On newer vehicles it can effect other systems that are related to the operating and the running of the vehicle. A little harder to defeat pollution devices on newer vehicles with all the systems run by microprocessors but if someone wants to do it they can. This law could be addressing the modified diesels that are made into coal rollers just as much as the gasoline powered vehicles with cats. You probably will still be able to buy equipment that would modify the performance of a vehicles as long as the emission equipment is not altered.
  • ToolGuy I wonder if Vin Diesel requires DEF.(Does he have issues with Sulfur in concentrations above 15ppm?)
  • ToolGuy Presented for discussion: https://xroads.virginia.edu/~Hyper2/thoreau/civil.html
  • Kevin Ford can do what it's always done. Offer buyouts to retirement age employees, and transfers to operating facilities to those who aren't retirement age. Plus, the transition to electric isn't going to be a finger snap one time event. It's going to occur over a few model years. What's a more interesting question is: Where will today's youth find jobs in the auto industry given the lower employment levels?