General Motors Co. reclaimed its crown as the top-seller in the U.S., buoyed by steady demand and a rebound in fourth-quarter production even as higher financing costs flash a warning sign for 2023.
GM and Toyota Motor Corp. both posted double-digit gains in the fourth quarter of 2022, as many major automakers January 4 reported U.S. sales for 2022. Ford Motor Co. is expected to provide its U.S. sales data January 5 and Tesla Inc., which provides global numbers, reported its results on January 2.
For the year, GM’s sales rose 3% to 2.3 million, allowing it to retake its position as the overall U.S. sales leader. It had lost that title in 2021 as Toyota narrowly outsold the Detroit-based carmaker for the first time since 1931.
The Japanese automaker’s U.S. sales fell 9.6% for all of 2022 to 2.1 million vehicles.
Total sales across all car brands for 2022 likely fell below 14 million units, the lowest since 2011, when the U.S. was still recovering from the 2008-2009 financial crisis. That number is expected to grow in 2023 as increased semiconductor supplies ease persistent production bottlenecks and boost the inventory of cars available on dealers’ lots.
In a sign of that improvement, carmakers likely sold new cars at an annual pace of 13.3 million in December, up 7.3% from a year earlier, according to the average forecast of six market researchers.
Retail sales of new cars in December likely rose 4% from a year ago to 1.27 million as inventories continued to improve and prices moderated, according to researcher Cox Automotive. Still, that’s short of the typical pre-pandemic sales of 1.5 million units in December, a time when carmakers historically have pushed year-end campaigns to hit annual targets.
“It’s not all doom and gloom,” Jack Hollis, Toyota’s North American sales chief, said in a call with reporters. “We think 2023 will be an uptick, not as high as we’d like it to be, but moving in the right direction.”
Cost remains a big issue for car buyers and sellers. While sticker price increases have peaked, financing charges are surging as a result of interest rate hikes. Financing is more expensive than ever for both new and used cars.
The average annual percentage rate for new vehicles rose to 6.5% in the last quarter of 2022 compared to 5.7% in the third quarter and 4.1% the same time a year earlier, according to Edmunds.com. The number of buyers with monthly payments exceeding $1,000 a month is at an all-time high.
That’s prompting some buyers to have second thoughts about pre-ordered vehicles and increasing the number of automobiles sitting in showrooms.
“For the first time in a year and a half to two years, customers are backing out of some pre-sold vehicles and there are cars hitting the lot that aren’t pre-sold,” David Christ, head of Toyota brand sales in the U.S., said in an interview. “It’s higher borrowing costs: Interest rates for new cars have gone up significantly.”
“It’s not a lot of cars, but it’s happening for the first time” in a long time, Christ said.
GM Goes Big
General Motors said its fourth-quarter deliveries climbed 41% to 623,261 vehicles thanks to the improved access to semiconductors. That contrasts with the car maker’s difficult period a year ago when it faced a meager supply of chips and production shutdowns.
The gains came mostly from higher fleet sales of vehicles like commercial grade pickups to corporate customers, with those rising 44% for the year even as retail sales fell 5% in 2022.
“There was a significant amount of pent-up demand throughout the year. That applies to commercial and fleet customers as well,” said GM spokesman Jim Cain.
Almost half of GM’s sales were pickups and large SUVs as the company prioritized output of bigger, high-margin vehicles in a year when semiconductor supplies were still running short of full capacity. Cadillac brand sales soared 75% in the quarter. Chevrolet Bolt and larger Bolt EUV electric models sold a record 38,000 units for the year.
GM said it will resume production of its Hummer electric pickup and expand production of Cadillac Lyriq EV in January.
Stellantis Sales Down
Stellantis NV said sales fell 16% in the fourth quarter and were down 13% for 2022 to 1.5 million vehicles. Sales of the automaker’s top-selling Jeep brand fell 12% for the year.
One bright spot was sales of the company’s plug-in hybrid vehicles, which rose 26%. Jeep’s Wrangler 4xe hybrid saw deliveries soar 46% for the year with 43,176 sales, which makes up almost 25% of the vehicle’s total volume.
Toyota’s Mixed Bag
Toyota’s U.S. deliveries rose 3.5% in December, as strong sales of the Tacoma pickup, Corolla and Camry sedans offset a 16.4% decline in the automaker’s Lexus luxury line. In the fourth quarter, sales increased 13% to 536,740 vehicles.
Toyota’s RAV4 compact SUV remained its top seller, with full year deliveries of 399,941, a 1.9% decline from a year earlier. Sales of Toyota’s Prius gas-electric hybrid fell 37% in 2022.
“What we’re seeing is improved supply chain resulting in improved inventories,” Hollis said. “It’s slow, but it’s steady.”
Honda Motor Co. said its sales fell 11% in the quarter and 33% last year as supply issues forced production cuts. The company said supplies were improving.
Mamadou Diallo, vice president of sales for American Honda Motor Co., said that despite the tough decline the company experienced in 2022, he sees sales growing in 2023 as semiconductor supply improves.
“Like the rest of the industry, we aren’t out of the woods yet with supply issues,” Diallo said in a statement. “But we begin 2023 with roughly double the on-hand inventory of 2022 and the expectation that this will mean a healthy sales increase this year.”
Nissan Sales Slump
Nissan’s sales in the most recent quarter fell 2% to 191,012 vehicles while its tally for the full year plunged 25% to 729,350 units. Lower sales of models such as the Kicks subcompact crossover, Sentra compact sedan and
Frontier mid-sized truck offset gains by the Altima mid-sized Sedan and Rogue SUV, Nissan’s two best-selling vehicles.
Nissan was able to secure adequate supplies of chips for those two core models, but struggled with production issues elsewhere in its line-up, Judy Wheeler, vice president of sales for its U.S. subsidiary, said in an interview.
“There is this one component we have been struggling to get,” Wheeler said. “We still have supply shortages on our smaller-end vehicles. Some of those vehicles are starting to come in and supply is starting to improve.”
Hyundai’s Hot December
Hyundai Motor Co. saw sales jump 40% in December to 72,058 vehicles — its best December ever, powered by growth in deliveries of models like its Tucson compact SUV and Kona subcompact crossover and Elantra compact sedan. For the last quarter of 2022, sales climbed 29% to 195,967 units — thanks in part to strong demand for its hybrids and EVs — while full year sales dipped 2% to 724,265 vehicles.
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