The U.S. auto industry has roared back from the pandemic, notching its strongest March sales in more than 20 years. But the widening microchip shortage now threatens to pinch supplies of many highly profitable and popular vehicles at a time when consumer demand is surging.
First-quarter retail sales climbed 26 percent, according to J.D. Power, and total light-vehicle sales reported rose 12 percent from the year- earlier period that included the dismal first few weeks of the pandemic. Fleet deliveries are well below normal so far this year but could begin rising as the travel business rebounds in the months ahead.
"March is the month that we can really say, at least in the retail part of the vehicle market, we are now fully recovered. I couldn't imagine saying that just a couple of months ago," Jonathan Smoke, chief economist for Cox Automotive, said on Automotive News' "Daily Drive" podcast. But, he added, "we're probably going to see more acute problems with inventory over the next couple of months, through the second quarter, than we've seen so far."