DETROIT: Problems in the highly competitive U.S. car market including weak prices, high inventories and difficult logistics dented profits and hit shares of automakers including Ford Motor Stellantis and Nissan on Thursday, as they scramble to find a fix.
Global automakers are facing a weakening outlook for sales across major markets such as the U.S., while also juggling an expensive transition to electric vehicles and growing competition from cheaper Chinese rivals.
U.S. automaker Ford plunged 16% after its second-quarter profit missed analyst expectations, weighed down by high warranty costs and a cash-burning electric vehicle business.
Shares in Milan-listed Stellantis lost nearly 9% after earlier hitting their lowest in almost a year. Nissan dropped 7%, sending the stock of its French alliance partner Renault down as well despite posting a first-half profit that beat estimates.
Automakers were dragged down by excess inventory in the United States, in part due to a June software outage that slowed or halted some dealerships’ operations. New-vehicle supply at the start of July was more than double the year-ago period, according to Cox Automotive.
Cox analysts expect inventories to normalize in a couple of months as the effects of the CDK software outage wane. Still, investors are wary of higher inventories as motor vehicle output has been strong in the United States.
