A year after losing the title it held for nearly a century as America’s top auto seller, General Motors is back on the rise. On Wednesday, GM reported US sales of 2.3 million vehicles. Strong fourth quarter sales, up 41% from a year ago, allowed it to end the year with sales up nearly 3% of the 2.2 million US vehicles sold in 2021 after experiencing a 13% decline. captured the top sales spot in 2021, full-year sales fell nearly 10% to 2.1 million, despite posting a 13% increase in fourth-quarter sales. lack of spare parts, especially computer chips, needed to build the cars and trucks customers want. US new vehicle sales are expected to fall to less than 14 million vehicles when final sales results are reported to the industry this week. from a decade ago. Sales dropped to 10.5 million in 2009, the year GM and Chrysler declared bankruptcy and received a federal bailout, and only rebounded to 12.7 million by 2011, the last year industry sales fell below 14 million. Sales reached 17 million in 2019. , the year before the pandemic hit the economy and supply chain. Most of the forecasts say that the problem of the supply chain is getting better, and that should allow car manufacturers to increase production in 2023. They point to better sales that took place in the fourth quarter than earlier in the year as proof that, even with high car prices and rising Interest rates are more expensive for buyers than in the past. That has led to predicting a modest increase in sales this year just north of 14 million vehicles once. again. But many experts are cautious about the forecast of increased sales depending on the US economy not falling into recession and instead simply experiencing slow growth. And the uncertainty about what will happen to the economy makes the outlook for car sales much more uncertain than the previous year, they said. Charlie Chesbrough, chief economist for Cox Automotive. “Usually we have an idea which way it is headed. But this year, it could be up or down. “There are several factors supporting new car sales in the coming year, even if the economy stumbles. One of them is the fact that car rental companies have not been able to buy the supply of new cars they need in the last two years, because car manufacturers have limited the supply of cars available for cheap fleet sales, selling all or almost all of their cars. forced customers instead.”Rental companies have run in half of the purchases that they are used to,” said Ivan Drury, director of insight at Edmunds. And Drury said if automakers start to see weakness in consumer demand, they can bring back incentives, including lower cost financing, that they have not been offered in recent years when there is more demand than supply. “The new incentive is almost nothing,” he said. is the pent-up demand from potential buyers who have delayed purchases because they can’t find the vehicle they want. But both Drury and Chesbrough said the high average price and high interest rates have driven buyers out of the market. A turn in the economy, especially when the historically low unemployment rate begins to rise, can quickly produce lower sales of new cars.
A year after losing the title it held for nearly a century as America’s top auto seller, General Motors is back on the rise.
On Wednesday, GM reported US sales of 2.3 million vehicles. Strong fourth quarter sales, up 41% from a year ago, allowed it to end the year with sales up nearly 3% of the 2.2 million US vehicles sold in 2021 after experiencing a 13% decline.
Meanwhile, Toyota, which has taken over the top sales spot in 2021, saw full-year sales drop nearly 10% to 2.1 million, despite posting a 13% increase in fourth-quarter sales.
In each of the last two years, the industry’s auto sales have been limited by a shortage of parts, primarily computer chips, needed to build the cars and trucks that consumers want. US new vehicle sales are expected to fall to less than 14 million vehicles when final sales results are reported to the industry this week.
That would be the lowest sales total since the country was just emerging from the Great Recession more than a decade ago. Sales bottomed out at 10.5 million in 2009, the year GM and Chrysler declared bankruptcy and received federal bailouts, and had only risen to 12.7 million by 2011, the last year industry sales fell below 14 million.
Sales reached 17 million in 2019, the year before the pandemic hit the economy and supply chain.
Most of the forecasts say that supply chain problems are getting better, and that should allow automakers to increase production in 2023. They point to better sales that took place in the fourth quarter than at the beginning of the year as proof, despite higher car prices. and rising interest rates make it more expensive for buyers than in the past.
That has led them to forecast a modest increase in sales this year to just north of 14 million vehicles once again.
But many experts warn that sales growth forecasts depend on the US economy not falling into recession and simply experiencing slower growth. And uncertainty about what will happen to the economy makes the outlook for auto sales more uncertain than in previous years, he said.
“I have been forecasting the car market for decades now. This next year is the most challenging,” said Charlie Chesbrough, chief economist for Cox Automotive. “Usually we have an idea of ​​where it’s going. But this year, it could be up or down.”
There are several factors that will support new car sales in the coming year, even if the economy stumbles. One of them is the fact that car rental companies have not been able to buy the supply of new cars they need in the last two years, because car manufacturers have limited the supply of cars available for cheap fleet sales, selling all or almost all of their cars. forced customers instead.
“Rental companies are driving half of what they used to buy,” said Ivan Drury, director of insights at Edmunds.
And Drury said if automakers begin to see weakness in consumer demand, they can bring back incentives, including lower cost financing, that they have not been offered in recent years when there is more demand than supply.
“Incentives these days are almost nothing,” he said.
So far, the demand is still strong, because there is a pent-up demand from potential buyers who are delaying purchases because they cannot find the vehicle they want. But both Drury and Chesbrough say higher average prices and higher interest rates have driven buyers out of the market.
A turn in the economy, especially when the historically low unemployment rate begins to rise, can quickly result in lower sales of new cars.
