Analyst Note| David Whiston, CFA, CPA, CFE |
Automakers reported March or in some cases first quarter U.S. sales to final customers. March sales were up 59.7% year over year while the seasonally adjusted annualized selling rate per Wards Intelligence was 17.75 million, the best March SAAR since the March record in 2000. The March 2021 SAAR had an easy comparable with the pandemic hitting U.S. auto sales in the back half of March 2020. The SAAR that month was only 11.36 million. Consumers continue to crave light truck models and Ford said its 87,883 retail (that is, non-fleet) unit increase of trucks and SUVs easily offset the 13,688 lost units from discontinued car models. We don’t see demand as a problem for any automaker. Lack of inventory from the pandemic and now the semiconductor shortage is the key issue. We don’t expect much, if any, improvement on this shortage until well into the second half of 2021. Automakers are building vehicles nearly complete, which should enable fast rollout of product once all parts are in but GM, for example, saying its inventory is down over 76,000 units from the end of 2020 is not a good sign for second quarter deliveries.