Chip shortage leaves GM vehicles unfinished in storage
The global shortage of computer chips and other parts forced General Motors to build 95,000 vehicles without certain components during the second quarter.
The Detroit automaker said in a regulatory filing Friday that most of the incomplete vehicles were built in June, and that it expects most of them to be finished and sold to dealers before the end of the year.
The unsold vehicles amounted to 16 per cent of GM’s total sales from April through June. The company said Friday that it sold more than 582,000 vehicles during the quarter, down more than 15 per cent from a year ago.
The company reaffirmed its full-year net income guidance of US$9.6 billion to US$11.2 billion with pretax earnings of US$13 billion to US$15 billion. For the first time the company predicted that it would make US$2.3 billion to US$2.6 billion before taxes in the second quarter. That fell short of analyst estimates of US$3.97 billion, according to FactSet.
The chip shortage has vexed automakers across the globe since 2020, forcing many automakers to temporarily close factories and trim production. The shortage has limited the supply of new vehicles on dealer lots in the Unite States to around one million, when in normal years it’s about 4 million at any given time.
That has pushed prices to record levels and limited vehicle selection, but it’s also led to strong profits for most automakers.
In a prepared statement, GM said its North American production has been relatively stable since the third quarter of last year, but short-term parts disruptions are continuing. “We are actively working with our suppliers to resolve issues as they arise to meet pent-up customer demand for our vehicles,” the statement said.
Most automakers have predicted minor improvement in the chip shortage during the first half of the year, with far better supplies from July through December.