July sales results trickling out this week indicate another strong rebound month for the U.S. auto industry even as automakers warn that the global chip shortage could hinder production for the foreseeable future.
The biggest winners to report so far are Kia and Mazda. Both posted improvements of more than 30% compared to last July. They, along with Honda, Hyundai and Volvo, are up more than 40% year-to-date so far in 2021.
Hyundai's best news came from some of its least likely nameplates; Accent and Elantra have both put up strong numbers so far in 2021 and continued to do so in July. Honda likewise saw strength from its HR-V and Passport. Honda has now sold the same number of HR-Vs in the United States so far in 2021 as it did in the entirety of its first full year on the market.
News wasn't so rosy for Subaru, which has run up against the supply shortage wall in a big way. Every vehicle in its lineup came up short compared to July, 2020, and most are behind for the year too as Subaru simply cannot source enough parts to supply its dealers with volume.
BMW and Stellantis became the latest major carmakers to warn on Tuesday that the shortage that has bedeviled the industry this year will drag on throughout 2021 and beyond, hitting production and sales. Other carmakers from Tesla to Ford have warned that for the foreseeable future, a lack of chips is the main speed bump.
Starving for chips, carmakers have focused production on higher-margin models, and have benefited from higher vehicle prices amid low inventories for consumers. Stellantis chief financial officer Richard Palmer said on Tuesday the world's fourth largest carmaker did not expect chip supply to improve before the fourth quarter, with a total projected production loss of around 1.4 million vehicles in 2021.
BMW, which has so far been relatively less affected by the chip shortage than some of its peers thanks to strong relations with its suppliers, also warned that the second half will be more challenging for the German luxury carmaker.
"The longer the supply bottlenecks last, the more tense the situation is likely to become," BMW chief financial officer Nicolas Peter said in a statement. "We expect production restrictions to continue in the second half of the year and hence a corresponding impact on sales volumes."
German chipmaker Infineon Technologies also painted a grim picture on Tuesday, saying it was battling extreme tightness in its markets as the latest wave of the COVID-19 cases disrupts production in Asia and inventories hit all-time lows.
"The rebound of global car markets continues to be hampered by acute supply limitations across the entire value chain," Infineon CEO Reinhard Ploss told analysts. "All in all, it will take time to get back to a supply-demand equilibrium."
"In our view, this will take until well into 2022," Ploss added.
This article contains reporting by Reuters.