US auto sales are growing significantly

Automakers are reporting a surge in vehicle sales in the US for the first three months of 2021. But shortages in chips and other problems in the supply chain threaten to destroy the momentum. Overall, US auto sales rose 11.3 percent year-on-year from January to March, according to industry data from Wards Intelligence. According to Wards, the industry could sell 16.8 million vehicles on an annualized basis - a sign that demand is about as high as it was before the Covid-19 pandemic. The spike in the first quarter of the year is due in part to the collapse in business in late March 2020, when the economy shut down to limit the spread of the coronavirus. In January and February 2021, according to data from Motor Intelligence, sales fell by 3.3 percent and 13 percent. The numbers would probably have been even better had it not been for a global shortage of semiconductors affecting production at many US factories. This weighed on manufacturers' profits and led to lower inventory levels for dealers, especially for the popular trucks and SUVs. In February, winter storms in Texas also disrupted the production of plastics used in seat foams and other materials, adding additional strain to the industry's supply chain. However, this did not affect customer demand. Nissan reported a US sales increase of nearly eleven percent in the first quarter. From the US manufacturers, General Motors on Thursday reported a nearly four percent increase in sales from January to March and expects demand to remain strong throughout the year. Stellantis - formerly Fiat Chrysler - reported a five percent increase in US sales, while Ford Motor sales were nearly flat. Japanese manufacturers Toyota and Honda, which were hit by the chip shortage later in the quarter, reported US sales up 22 and 16 percent in the first quarter, respectively. South Korean automaker Hyundai Motor, meanwhile, was able to keep inventory levels at dealerships in the US stable in the first quarter, reporting sales growth of 28 percent.