General Motors
GM's Chevrolet Equinox EV

GM Says Chip Shortage Hurt Q2 Sales, Sticks to Forecasts

July 1, 2022
The company ended June with about 95,000 vehicles waiting for chips or other parts.

General Motors Corp. executives on July 1 said lasting supply chain problems will ding its second-quarter sales because it is sitting on about 95,000 vehicles that still need parts, primarily semiconductors.

Most of those unfinished vehicles were built in June, GM said in a filing with the U.S. Securities and Exchange Commission. Not being able to ship many of them to dealers—which marks the point at which the company recognizes a sale—means sales for the second quarter were down about 15% from the prior-year period at roughly 582,000. Despite that, the GM team said it expects the excess inventory to be sold by year-end and reiterated its full-year forecasts for profits (between $9.6 billion and $11.2 billion) and free cash flow ($7 billion to $9 billion).

“We appreciate the patience and loyalty of our dealers and customers as we strive to meet significant pent-up demand for our products, and we will work with our suppliers and manufacturing and logistics teams to deliver all the units held at our plants as quickly as possible,” Steve Carlisle, president of GM’s North American operations, said in a statement.

The sales warning and its citing of semiconductor shortage looks set to test GM CEO Mary Barra’s optimism of recent months that the chip shortage will ease significantly in the second half of 2022 and let GM grow wholesale volumes by 25% to 30%. The Detroit-based auto titan isn’t the only company to have talked about needing to park mostly-manufactured vehicles missing key parts: Daimler Truck Holding AG’s Martin Daum recently detailed his team’s ongoing challenges, which have led to some 10,000 unfinished trucks awaiting key parts.

Shares of GM (Ticker: GM) were briefly halted early on July 1. By mid-morning, they were changing hands at about $32.30, up 1.6% from their June 30 close. Year to date, they have lost nearly half of their value, cutting the company’s market capitalization to about $47 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas JournalT&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.

With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.

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