General Motors (GM) is back on top one year after losing its position as the top automobile seller in America, which it had held for almost a century.
GM reported that 2.3 million automobiles were sold in the United States. It was able to end the year with sales that were up more than 3% from the 2.2 million US vehicles it sold in 2021 when it experienced a 13% decline due to strong fourth-quarter sales that were up 41% from a year earlier.
Toyota, which had held the top sales position in 2021, saw its full-year sales fall nearly 10% to 2.1 million, despite a 13% increase in fourth-quarter sales.
In each of the previous two years, industry-wide auto sales were hampered by a lack of parts, primarily computer chips, required to build the cars and trucks that customers desired. When the final sales figures are released later this week, total new vehicle sales in the United States are expected to be slightly less than 14 million vehicles.
Since the nation was only recently emerging from the Great Recession more than ten years ago, that would be the lowest sales total. Sales hit their lowest point in 2009, the year when GM and Chrysler filed for bankruptcy and got federal bailouts, at 10.5 million, and they didn’t recover until 2011—the last year that industry sales went below 14 million—when they only reached 12.7 million.
Sales in the year prior to the pandemic upending the economy and supply networks were 17 million.
The majority of predictions indicate that the supply chain issues are improving, which should enable automakers to expand production in 2023. Even if increasing auto costs and rising loan rates make it more expensive for customers than in the past, they refer to the improved sales that occurred in the fourth quarter compared to earlier in the year as evidence of that.
As a result, they have predicted that sales will only slightly increase this year to little north of 14 million automobiles.
“I’ve been forecasting the car market for decades now. This next year is the most challenging. Normally we an idea which way it is headed. But this year it could be up or down,” said Charlie Chesbrough, chief economist for Cox Automotive.
Even if the economy struggles, there are a number of factors that will help new car sales in the upcoming year. One is that, over the past two years, car rental companies have not been able to purchase the necessary quantity of new vehicles because automakers have limited the number of vehicles available for lower-priced fleet sales and have sold all or nearly all of their remaining inventory to consumers in their place.
Even if the economy falters, there are a number of factors supporting new car sales in the coming year. One is that car rental companies have not been able to purchase the supply of new cars they require in the last two years because automakers have limited the supply of cars available for lower-priced fleet sales, instead selling all or nearly all of the cars they have to consumers.
“Rental companies have been running at half of the purchases that they’re accustomed to,” said the director of insights at Edmunds, Ivan Drury.
Drury also stated that if automakers begin to see a drop in consumer demand, they can reinstate incentives such as lower-interest financing that they haven’t had to offer in recent years because there was more demand than supply.
He said, “The incentives recently have been virtually nothing.”
So far, demand remains strong, owing to pent-up demand from potential buyers who postponed purchases because they couldn’t find the vehicle they desired. However, both Drury and Chesbrough believe that rising average prices and interest rates are already driving buyers out of the market.
A downturn in the economy, particularly if historically low unemployment rates begin to rise, could quickly lead to a drop in new car sales.