To The Moon

Major auto makers reported a pullback in U.S. sales for the first quarter of 2022, as a shortage of vehicles on dealership lots continued to hamper business and suppress buying activity ahead of what is typically a busy selling season.

Analysts are forecasting first-quarter sales for the industry could drop as much as 16% over the prior-year period, when car-lot stock was more plentiful and buyers, benefiting from a recovering economy, snatched up vehicles at a blistering pace.

Auto executives and dealers say underlying demand remains strong with most new cars and trucks sold almost as soon as they hit the lot. But supply-chain disruptions continue to weigh on factory production, limiting how fast car companies can restock dealerships and fulfill vehicle orders.

Toyota Motor Corp. held on to its U.S. sales lead over General Motors Co. in the first quarter, although both global auto-making giants reported double-digit declines in their sales results over the prior-year period.

Toyota’s U.S. sales slid nearly 15% in the just-ended quarter, while GM was down roughly 20%.

Among the other Asian car companies, Nissan Motor Co. reported a nearly 30% drop in U.S. sales for the January-to-March period. Hyundai Motor Co. said its U.S. sales were off 4% over the prior-year quarter. Honda Motor Co.’s first-quarter U.S. sales were down 23%.

Stellantis NV, the global car company that owns Jeep, Ram and other U.S. auto brands, also reported a 14% decline in U.S. sales for the quarter.

“Make no mistake, this market is stuck in low gear,” said Charlie Chesbrough, a senior economist for auto industry research firm Cox Automotive.

The global auto industry is also confronting new challenges this year with the Ukraine conflict and another wave of Covid-related factory restrictions in China threatening to worsen parts shortages for vehicle assembly lines, analysts say.

The industry’s annualized selling pace—a measure of the car market’s strength stripping out seasonal factors—is expected to slow to 12.7 million in the first quarter, according to J.D. Power. In comparison, auto makers last year sold just shy of 15 million vehicles in the U.S., the firm said, up slightly from 2020. For five straight years before the pandemic, the industry had eclipsed the mark of 17 million vehicles.

Ford Motor Co. has said it would release its sales figures Monday, while electric-car maker Tesla Inc. is expected to report its global delivery figures in the coming days.

March is typically a busy time for the auto industry, with car companies and dealerships stepping up sales promotions to entice buyers as the weather improves in many parts of the country. Last year, the industry had a blowout spring, with the selling pace approaching prepandemic levels.

Since then, obstacles have continued to mount for the car sector. A shortage of semiconductors—critical to assembly of most new vehicles today—has curtailed factory production, resulting in historically low levels of inventory on selling lots.