Luxury retailers are crushing it — but ...

The luxury-vehicle segment is on a post-Covid high with sales surging 63 percent in the second quarter compared with a year ago.

The segment is benefiting from the easing of COVID-19 restrictions in major metro markets, where a higher concentration of premium vehicle sales occur, said Jessica Caldwell, executive director of insights at Edmunds.

Premium brands sold a total of 624,414 cars and light trucks in the second quarter, outpacing the broader industry's 49 percent increase.

But as the global semiconductor shortage silences assembly lines and taps the brakes on sales activity, that euphoria may subside in the second half.

Inventory constraints cooled the seasonally adjusted, annualized selling rate to 15.35 million last month, according to Motor Intelligence data. Spring saw the hottest three-month stretch of new-vehicle sales since 2005, and in April, the SAAR peaked at 18.69 million.

Despite the robust results, automakers are sounding alarm bells.

Mercedes-Benz said last week that chip scarcity affected global deliveries in the second quarter, and especially in June. The drag on sales is expected to continue through year end, the automaker said.

The supply chain disruption is also worrying Jaguar Land Rover. The British automaker noted last week it expects wholesale volume in the three months ending Sept. 30, to be about 50 percent lower than planned.

"The chip shortage is presently very dynamic and difficult to forecast," JLR said in a statement. "We expect some level of shortages will continue through to the end of the year and beyond."

Javier Varela, Volvo Cars head of industrial operations, characterized the second half of the year as "very, very challenging."

"We are managing our production sometimes with two weeks' visibility," Varela told Automotive News last month. "The situation will remain until the end of the year, maybe into Q1 next year."

Factory disruptions are reflected on dealership lots. As of June 14, the average dealer days' supply for luxury brands in the U.S. was 37, slightly higher than the 31 days for nonluxury brands, according to Cox Automotive data.

Among luxury names, Lexus had the lowest days' supply at 22, while Infiniti and Genesis tied for the highest inventory levels at a 60-day supply.

"The brands that win in the luxury vehicle race this year will be the ones that have inventory of volume models," said Michelle Krebs, executive analyst at Autotrader.

"Ones that efficiently distribute that inventory and that have the right inventory in the right places."

The three industry segments with the highest inventory are large premium cars, compact premium cars and subcompact cars, according to J.D. Power data.

Premium brand transaction prices are up 9 percent from two years ago, vs. a 15 percent increase for mainstream brands.

The challenges are not keeping the industry's two leading German luxury rivals from staging a horse race.

At the midyear mark, BMW had outsold Mercedes-Benz by 7,348 vehicles, a reversal from a year ago when Mercedes had a 16,795-vehicle lead.

BMW captured the U.S. luxury crown in 2019 and 2020 after Mercedes had a three-year run atop the rankings.

In the second quarter of this year, BMW sold 96,561 vehicles, up 89 percent from a year earlier. BMW was able to ramp up supply, buoying its second-quarter sales performance.

"We put in additional production capacity of around 10 percent, versus the original plan," BMW North America sales chief Shaun Bugbee said. "For Q3, our inventory position will be more critical than it was for the first half of the year ... if retail demand continues to exceed our expectations."

Lexus saw its sales climb 65 percent to 83,459 vehicles in the quarter.

Mercedes, which led the race in the first quarter, slipped to third place in the second quarter. Mercedes delivered 82,390 vehicles, excluding commercial vans, in the second quarter, up 39 percent from a year earlier.

Among other luxury brands, Tesla delivered an estimated 73,300 cars and crossovers — a 97 percent increase in second-quarter sales.

Audi reported sales of 66,995 in the quarter, up 92 percent from a year earlier. Volvo's second-quarter sales rose 54 percent to 36,515, propelled by demand for plug-in models. Its electrified Recharge models represented 20 percent of total sales in the U.S. last month.

Genesis sales jumped 209 percent to 11,076. Meanwhile, Porsche reported quarterly U.S. sales of 18,958 vehicles, a 56 percent uptick from the same time last year.