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BusinessFord’s U.S. sales continued to recover from chip shortage in October

Ford’s U.S. sales continued to recover from chip shortage in October

Bronco SUVs in manufacturing at Ford’s Michigan Assembly plant, June 14, 2021.

Michael Wayland | CNBC

DETROIT – Ford Motor’s U.S. automobile sales confirmed optimistic indicators of restoration from an ongoing shortage of semiconductor chips that is wreaked havoc on the worldwide automotive trade this yr.

The Detroit automaker on Wednesday reported sales of 175,918 new autos in October, down by 4% from a yr in the past, however are a far narrower loss than in prior months. The sales mark Ford’s finest sales by quantity since April and the primary time since May that the corporate hasn’t reported a double-digital month-to-month loss in contrast with 2020.

“Through June of this year, Ford retail sales were up 10.7%. With constrained inventories and record turn rates in the second quarter, we have been working closely with our dealers gathering retail orders, which are up 16-fold over last year,” mentioned Andrew Frick, Ford vice chairman of U.S. and Canada sales.

In one other optimistic be aware, Ford mentioned automobile inventories, which have been at report lows due to the chip shortage, elevated by 7,000 models from a month earlier to 243,000 automobiles and vehicles.

Ford’s sales final month outpaced the trade, in accordance to Cox Automotive. The auto analysis firm on Wednesday estimated new U.S. automobile sales have been down by about 21% in contrast with October 2020. That’s higher than Cox’s preliminary forecast of a 30% decline.

“The market is still experiencing very low inventory and correspondingly low incentives, but the worst is likely behind us,” Cox mentioned in a launch.

Ford is amongst a handful of automakers to report new month-to-month automobile sales. Others akin to General Motors and Stellantis (previously Fiat Chrysler) solely report quarterly sales.

Ford’s October sales come every week after the corporate almost doubled Wall Street’s earnings expectations for the third quarter and raised its full-year adjusted earnings steerage to between $10.5 billion and $11.5 billion, up from between $9 billion and $10 billion. 

However, Ford is not in the clear concerning its provide of semiconductor chips simply but. CFO John Lawler final week mentioned the corporate expects the chip shortage to proceed into subsequent yr and doubtlessly, to a far lesser extent, into 2023.

Lawler mentioned Ford expects a ten% enhance in wholesale automobile volumes in 2022 in contrast with this yr, because the semiconductor shortage continues to impression the enterprise.

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