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General Motors, Toyota and other automakers suffered a hit to US sales in the latest quarter as supply chain woes continued to crimp inventories, according to results released Friday. Online News
GM sold 582,401 autos in the three months ending June 30, a drop of 15 percent from the same period a year ago.
The Detroit giant said it is holding 95,000 partially-built vehicles in need of components that it expects to deliver by the end of 2022.
Such maneuvers have become the norm over the last year as manufacturers try to make headway on as many high-margin vehicles as possible amid limited supply of semiconductors and other key items.
On the positive side, GM said it scored strong sales for its pickup trucks, the Chevrolet Silverado and GMC Sierra, despite low inventories. And “pent-up demand” drove sales growth in other vehicles, including the Chevrolet Camaro and Chevrolet Colorado.
GM reaffirmed its full-year profit outlook, but its second-quarter net income range of between $1.6 billion and $1.9 billion lagged consensus estimates.
Meanwhile, Toyota reported sales of 531,105 over the same period, a drop of 23 percent compared with the 2021 quarter, and the Japanese company also cited “ongoing inventory challenges” hindering its dealerships.
A bright spot has been a jump in sales of Toyota’s electric vehicles, which have comprised more than 25 percent of Toyota’s sales so far this year.
Cox Automotive has forecast a 19.3 percent drop in US auto sales for the second quarter.
“Even though economic conditions have worsened in the past months, the lack of supply is still the greatest headwind facing the auto industry today,” said Charlie Chesbrough, senior economist at Cox.
Hyundai Motor America reported a drop of 23 percent sales drop to 184,191 units.
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During the past few years, a number of the world’s central banks have engaged in massive programs of monetary expansion, even as jobs and businesses were lost by way of virus-related restrictions and quarantines.
For example, beginning in March of 2020, the US Federal Reserve engaged in a substantially greater program of monetary expansion by purchasing hundreds of billions of dollars of Treasury and corporate bonds.
Since the early part of March 2020 to date, the Federal Reserve has added over $4 trillion to its holdings.
In particular, whereas on or about February 24, 2020, the holdings of the Federal Reserve stood at $4.2 trillion, on or about January 17, 2022, the holdings of the Federal Reserve stood at about $8.9 trillion.
As well, the Federal Reserve has kept interest rates low.
Recently, Jerome Powell, the head of the Federal Reserve, said that he wasn’t concerned about inflation and that, for the none, the Federal Reserve would keep interest rates at low levels.
Another examples is that of the Bank of Japan.
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According to Fred Economic Data, as of October 2021, the Bank of Japan’s holdings were about $6.4 trillion or about 725 trillion Yen.
In the early part of March 2020, the Bank of Japan’s holdings were $5.3 holdings. During the period mentioned, the Bank of Japan added over one trillion dollars to its holdings.
A number of corporations have been borrowing money inexpensively and have been purchasing their own shares of stocks, increasing share prices of stocks.
Still, there are concerns among investors.
A number of them have expressed concerns about central banks’ eventually increasing interest rates, as, during the past year, inflation levels have been increasing.
The combination of low interest rates, expansive monetary policies, fiscal stimulus programs, which themselves have infused trillions into the US economy, and shortages of goods and services caused by virus-related restrictions and lockdowns has increased levels of inflation.
Investors also have worried, for example, about announcements that were made by companies like Toyota and VW; months ago, those companies announced that because of shortages of particular types of material, they would be reducing levels of production.
Many months ago, the results of a survey of UK manufacturers were released.
That survey indicated that many businesses in the UK were concerned about shortages of supplies.
In general, jobs and businesses have been lost by way of mandates, restrictions and quarantines, which, in their turn, were imposed by way of the virus narrative.
In the US, overall, the mortality rate of the virus is about .069%, according to Statista, an award-winning service.
The recovery rate is over 99% for most age groups.
What has followed in the wake of lockdowns and mandates has been the infusion of trillions of dollars into the US economy, the increasing succeess of online businesses like Amazon and other large online retailers, various bank and tech-related stocks, the shuttering of small to medium-sized businesses and the loss of millions of jobs.
Another result has been the increasing levels of inflation, especially those of food and fuel.
In official terms, for purposes of reporting, the US Labor Department uses what is called “core inflation”.
Core inflation excludes items like food and fuel, as those are deemed too volatile.
Shortage and supply line difficulties began well before the onset of the war in Ukraine, according to a number of observers.
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