The ongoing semiconductor microchip shortage has been a major disruptor to the automotive industry, diminishing inventory levels and leaving dealerships with little to no new cars to sell. On the flip side, those in the used car business have been able to turn record profits due to the consequential increase in value of second-hand rides. One such company is Carvana, which recently saw its shares increase by more than $0.25 each.
The uptick in value is the result of $3.3 billion in earnings for Q2 2021, which, according to Barron’s, beat the consensus call for $2.5 billion. The report goes on to say that the number of vehicles sold by Carvana is up nearly 100 percent while the year-over-year revenue has increased by nearly 200 percent and the gross profit is up almost 270 percent. The company told shareholders that its average gross profit per unit is up from $2,727 tp $5,120 per unit compared to Q2 2020.
The growth is indeed quite drastic, and according to Carvana CEO Ernie Garcia the trend will last as long as there’s a shortage in semiconductor microchips.
One can simply take a look at GM’s very own product offerings to see the mechanism at play here. Take, for instance, the Chevrolet Camaro which is seeing second-hand examples of the sports coupe selling for over $36,000 in June — up more than 40 percent compared to June 2020. While part of the increase is the result of consumers combating boredom brought on by the pandemic, an even more substantial factor is a decrease in the availability of new options.
The GM Lansing Delta Township plant where the Camaro is built has experienced recurring shutdowns due to the semiconductor shortage, making the vehicle hard to come by at dealerships. This likely has more prospective Chevy Camaro buyers shopping second-hand, in turn driving up used prices for the two-door. The GM Lansing Grand River plant is expected to come back online on August 9th, and 2022 Camaro models are set to enter production on August 17th.
Every vehicle in the segment posted a drop in sales volume except for one.