A year after losing its title as America’s top car seller for nearly a century, General Motors is back on top. On Wednesday, GM reported sales of 2.3 million vehicles in the US. Strong fourth-quarter sales, up 41% from a year earlier, allowed it to end the year with sales accounting for about 3% of the 2.2 million U.S. vehicles sold in 2021 after a 13% decline. Meanwhile, Toyota, which had topped sales in 2021, saw its full-year sales fall nearly 10% to 2.1 million, despite posting a 13% rise in fourth-quarter sales. In each of the past two years, industry-wide auto sales were limited by a shortage of parts, mainly computer chips, needed to build the cars and trucks that consumers wanted. Total U.S. new vehicle sales are expected to fall to just under 14 million vehicles when final industry-wide sales results are reported later this week. It would be the lowest sales since the country was just coming out of the Great Depression. than a decade ago. Sales were below 10.5 million in 2009, the year GM and Chrysler filed for bankruptcy and received a federal bailout, and by 2011 had reached just 12.7 million, the last year industry sales fell below 14 million. Sales in 2019 were 17 million. , a year before the pandemic hit both the economy and the supply chain. Most forecasts say supply chain issues are getting better, and that should allow automakers to ramp up production in 2023. They point to better sales in the fourth quarter. As proof of this, at the beginning of the year, higher car prices and rising interest rates have also made it more expensive for buyers than in the past. Due to which a modest increase in sales is predicted this year. again. But many experts caution that sales growth forecasts depend on the U.S. economy not falling into recession and instead experiencing only slower growth. And uncertainty about what will happen to the economy is making the outlook for car sales more uncertain than in previous years, he says. “I’ve been predicting the car market for decades. This next year is the most challenging,” he said. Charlie Chesbrough, Chief Economist at Cox Automotive. “Normally we have an idea of which way it’s going. But this year, it could be up or down.” There are many factors supporting new car sales next year, even if the economy stumbles. One fact is that car rental companies have not been able to buy the supply of new cars they need in the past two years, as automakers have limited the supply of cars available for low-cost fleet sales and sold all or virtually all cars. Instead customers had “rental companies running at half of what they’re used to buying,” said Evan Drury, director of insight at Edmonds. And Drury said that if automakers begin to see weakness in consumer demand, they could bring. Back incentives, including low-rate lending, which they didn’t have to offer in recent years when demand outstripped supply. “The recent incentives have been virtually nothing,” he said. So far, demand is still strong, as there is demand from potential buyers who have delayed purchases because they couldn’t find the vehicle they wanted. But both Drury and Chesbrough say higher average prices and higher interest rates are already driving buyers out of the market. A turn in the economy, especially if the historically low unemployment rate begins to rise, can quickly lead to a decline in new car sales.
A year after losing its title as America’s top car seller for nearly a century, General Motors is back on top.
On Wednesday, GM reported sales of 2.3 million vehicles in the US. Strong fourth-quarter sales, up 41% from a year earlier, allowed it to end the year with sales accounting for about 3% of the 2.2 million U.S. vehicles sold in 2021, compared with a 13% decline.
Meanwhile, Toyota, which held the top sales position in 2021, reported a 13% increase in fourth-quarter sales, but its full-year sales fell nearly 10% to 2.1 million.
In each of the past two years, industry-wide auto sales were constrained by a shortage of parts, mainly computer chips, needed to build the cars and trucks that consumers want. Total US new vehicle sales are expected to fall to just under 14 million vehicles when final industry-wide sales results are reported later this week.
That would be the lowest sales total since the country was coming out of the Great Depression just over a decade ago. Sales were below 10.5 million in 2009, the year GM and Chrysler filed for bankruptcy and received a federal bailout, and by 2011 had reached just 12.7 million, the last year industry sales fell below 14 million.
Sales were 17 million in 2019, a year before the pandemic hit both the economy and supply chain.
Most forecasts say supply chain issues are getting better, and that should allow automakers to ramp up production in 2023. They point to better sales in the fourth quarter as proof, despite higher car prices. And rising interest rates are making it more expensive for buyers than in the past.
That’s why they’re once again predicting modest growth in sales this year north of 14 million vehicles.
But many experts caution that sales growth forecasts depend on the U.S. economy not falling into recession and instead experiencing only slower growth. And uncertainty about what will happen to the economy makes the outlook for car sales more uncertain than in previous years, he says.
“I’ve been forecasting the car market for decades. This coming year is the most challenging,” said Charlie Chesbrough, chief economist at Cox Automotive. “Usually we have an idea where it’s going. But this year, it could be up or down.”
Even if the economy stumbles, there are several factors that should support new car sales in the coming year. One fact is that car rental companies have not been able to buy the supply of new cars they need in the past two years, as automakers have limited the supply of cars available for low-cost fleet sales and sold all or virtually all cars. Instead were for customers.
“Rental companies are running at half the procurement they’re used to,” said Evan Drury, director of insights at Edmonds.
And Drury said that if automakers begin to see weakness in consumer demand, they could bring back incentives, including low-rate financing, which they haven’t had to offer in recent years when demand outstripped supply.
“Recently the incentives have been virtually nothing,” he said.
So far, demand is still strong, as is demand from potential buyers who have delayed purchases because they couldn’t find the vehicle they wanted. But both Drury and Chesbrough say higher average prices and higher interest rates are already driving buyers out of the market.
A turn in the economy, especially if the historically low unemployment rate begins to rise, can quickly result in new car sales.
