One year after losing the title it held for nearly a century as America’s largest automaker, General Motors is back on top.
(GM) US sales reported on Wednesday of 2.3 million vehicles. Strong fourth-quarter sales, up 41% from a year ago, allowed it to finish the year with sales up nearly 3% from the 2.2 million US vehicles it sold in 2021, when it suffered a 13% decline.
In each of the past two years, industry-wide auto sales have been limited mainly by a lack of parts computer chipset, needed to build the cars and trucks that consumers want. Total new vehicle sales in the United States are expected to fall below 14 million vehicles when final sales results across the industry are released later 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 at 10.5 million in 2009, the year General Motors and Chrysler declared bankruptcy and received federal bailouts, and only climbed to 12.7 million by 2011, last year industry sales fell below 14 million.
Sales were 17 million in 2019, the year before the pandemic upended the economy and supply chains.
Most forecasts are that supply chain problems are improving, and that should allow automakers to ramp up production in 2023. They point to better sales that occurred in the fourth quarter than they did earlier in the year as evidence of this, even with Rising car prices and increasing interest rates make it more expensive for buyers than it was in the past.
This, in turn, has led them to expect a modest increase in sales this year north of 14 million vehicles again.
But many experts warn that their forecasts for increased sales do not depend on the US economy fall into a slumpinstead Simply experiencing slower growth. And they say uncertainty about what will happen to the economy makes the outlook for auto sales much more uncertain than in previous years.
“I’ve been anticipating the auto market for decades now. This coming year is the most challenging,” said Charlie Chesebrough, chief economist at Cox Automotive. “Usually we have an idea of where it’s going. But this year could be up or down.”
A number of factors support new car sales in the coming year, even if the economy falters. One is the fact that rental car companies haven’t been able to purchase the supply of new cars they need in the past two years, as automakers have limited the supply of cars available to lower-priced fleet sales, selling all or nearly all of the cars they had. to consumers instead.
“The rental companies were doing half of the buying they used to,” said Evan Drury, director of insights at Edmonds.
If automakers start to see consumer demand weaken, Drury said, they can bring back incentives, including lower-rate financing, that they haven’t had to offer in recent years when there was more demand than supply.
“Incentives have been almost a thing lately,” he said.
Demand is still strong so far, as there is pent-up demand from potential buyers who have delayed purchases because they couldn’t find the car they wanted. But both Drury and Chesbrough say that rising average prices and higher interest rates are actually driving buyers out of the market.
A turnaround in the economy, especially if historically low unemployment rates start to rise, could quickly lead to a decline in new car sales.
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