Analysts expect a significant slowdown in auto production and sales in the second half of 2021, because of the ongoing computer-chip shortage and the impact of COVID-19 variants on the global supply chain.

As a result, analysts set the U.S. light-vehicle forecast for 2021 at 16.5 million units, said Jeff Schuster, president of global forecasting for LMC Automotive, at the Center for Automotive Research Management Briefing Seminars in Traverse City, Michigan.

“We were around 17 million for the year,” Schuster said. “Then, obviously, we ran out of vehicles.”

LMC Automotive expects the semiconductor shortage to cut production in North America by about 452,000 units over the remaining months. The company also expects the chip shortage to impact production by about 1.5 million units, he says.  

North American consumer demand has remained high, contributing to “inventory burn,” LMC says.

By the end of July, the U.S. market had only slightly over 1 million units in inventory, which translates to about a 22-day supply at the present sales rate, reported Stephanie Brinley, principal analyst-Americas for IHS Markit.

That’s a decline of 1.5 million units, or 59%, vs. a year ago, IHS Markit said.

U.S. light-vehicle sales were about 8.3 million in the first half of 2021, an increase of 29.1% over the same period in 2020, according to Market Intelligence.