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No End in Sight for Auto Sales Slump on Chip-Constrained Output

  • December sales are seen dropping 23% from a year earlier
  • Industry had its worst second half since the Great Recession
Vehicles in a nearly empty lot at a car dealership in Richmond, California, on July 1
Vehicles in a nearly empty lot at a car dealership in Richmond, California, on July 1Photographer: David Paul Morris/Bloomberg
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Duane Paddock is used to carrying upwards of 800 vehicles at his self-named Chevrolet dealership near Buffalo, New York. But these days, thanks to the semiconductor shortage, he’s selling most of the vehicles General Motors Co. sends him as soon as they arrive.

Since the dealership has almost no inventory, Paddock’s sales staff is selling cars and trucks by showing customers a computer-screen view of what cars will look like and placing orders. Then they wait. It’s working well enough that he doesn’t think he’ll need to carry a huge lot of cars when, hopefully, the semiconductor shortage ends one day.