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General Motor’s Third Quarter Sales Dip Due to Massive Chip Shortage

By:
Hassan Maishera
Published: Oct 1, 2021, 17:55 UTC

General Motors has reduced a massive decline in its sales volume for the third quarter of the year as the continued chip shortage affected its performance.

General Motors

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General Motors has experienced a decline in its sales for the third quarter as the automobile industry continues to experience a shortage of chips.

General Motors Experiences A Dip In Sales

General Motors, one of the leading automobile manufacturers in the world, has revealed that its sales in the third quarter of the year have reduced. The automobile manufacturer said its sales dropped due to the continued chip shortage.

The Detroit automaker said earlier today that it sold roughly 447,000 vehicles from July through September. This represents a 32.8% decline from the same quarter a year ago when the sales dropped due to the Coronavirus pandemic. General Motor’s decline in sales was even higher than the industry analysts’ expectations of 28.9%.

General Motors has been forced to shutter plants for the past few months due to the chip shortage. Like many other automobile manufacturers globally, the company has also been forced to focus on manufacturing vehicles that are in high demand. General Motors has been focusing on its full-size pickup trucks, which have been in high demand in recent months.

GM’s Shares Up By Less Than 1%

This latest development didn’t surprise the market as the company warned its investors last month to expect a decline of roughly 200,000 units in terms of sales volume for the second half of the year.

Despite the decline in sales, General Motors continues to maintain its financial guidance for 2021. General Motors expects its adjusted earnings for the year to be between $11.5 billion and $13.5 billion, or $5.40 to $6.40 a share.

The numbers aren’t looking good for General Motors at the moment. Every General Motors’ brand took a hit in the third quarter in terms of sales, with Chevrolet recording the biggest loss (36.1%)

GM stock chart. Source: FXEMPIRE

Despite that, the shares of General Motors are up by less than 1% today. GM is trading at $52.95 per share, up by 0.5% since the US market opened. GM is also up by 30% since the start of the year despite the continued chip shortage.

The shares of General Motors were trading at $40 each at the start of the year, but they are now trading around $53.

About the Author

Hassan is a Nigerian-based financial Journalist and cryptocurrency investor.

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