Toyota Motor Corp. grabbed the US sales crown from General Motors Co., swiping an honor that the Detroit automaker has held since Herbert Hoover was president.
If GM’s explanation is to be believed – that its 43 per cent fourth-quarter sales decline and 13 per cent tumble for the year stemmed from a semiconductor shortage – then last year’s sales race was really a supply-chain pageant. Whoever could best cajole stretched chip producers for more product came out a winner.
Navigating the squeeze has been a nightmare for the auto industry, and especially for US. carmakers. While GM’s sales fell for the year, Toyota, Honda Motor Co. and Nissan Motor Co. posted gains.
Toyota may not be No. 1 – the spot GM had occupied beginning in 1931 – for long.
“We see it as not sustainable,” Jack Hollis, the company’s senior vice president of automotive operations, said without elaborating Tuesday at a briefing for reporters.
GM agreed. Steve Carlisle, the carmaker’s president for North America, said the company will increase sales this year. Most major automakers reported fourth-quarter U.S. sales on Tuesday, with Stellantis NV, which owns the Jeep and Ram brands, posting full-year sales down 2 per cent and an 18 per cent drop in the last quarter. Ford Motor Co. is expected to release its figures Wednesday.
Tough road ahead
To retake its leadership position, GM will have to return to something closer to the 2.5 million vehicles the company delivered in 2020. Before the Covid-19 pandemic and semiconductor shortage hit, GM sold about 2.9 million vehicles in 2019.
“Our dealers and our engineering, supply chain, manufacturing and brand teams moved mountains to satisfy as many customers as possible in 2021” Carlisle said in a statement. “In 2022, we plan to take advantage of the strong economy and anticipated improved semiconductor supplies to grow our sales and share.”
Market share is vital to GM’s long-range target of doubling revenue to $280 billion. That will require keeping buyers of gasoline-burning cars and trucks and stealing new ones who want electric vehicles.
And as production recovers, GM may not want every sale it can get. Domestic automakers typically keep 80 days worth of vehicles on dealer lots, while Japanese automakers keep as few as 50 days worth available. Thinner inventory allows for better pricing and fatter profits.
For Toyota to stay in the lead it would need a much bigger slice of the US market than it’s had before. Toyota’s share inched up to 14.3 per cent in 2020 from 14 per cent in 2018. GM was 17.3 per cent, little changed from the 17.1 per cent notched in 2018, according to Bloomberg Intelligence.
Overall, it was a tough year for the industry and ended on a sour note. Carmakers likely sold a seasonally adjusted annual rate of about 12.5 million new vehicles in December, down 23 per cent from a year earlier, according to the average forecast of six market researchers surveyed by Bloomberg.
For the full year, US auto sales likely came to 14.9 million vehicles, up 2.5 per cent from the coronavirus-stricken days of 2020, according to Cox Automotive. Automakers typically sell more than 16 million vehicles a year.
The chip shortage forced GM to allocate supply to its most profitable vehicles. Fourth-quarter sales of the Chevy Silverado fell more than 30 per cent and tumbled 21 per cent for the GMC Sierra, but a spokesman said the company still sold more full-size pickups than anyone.
Sales climbed for the Chevy Tahoe and Suburban, the GMC Yukon and the Cadillac Escalade large sport utility vehicles – the company’s most profitable models.
Toyota’s strong 2021 performance was buoyed by sales of sedans such as the Corolla and Camry. The RAV4 remained the automaker’s top-selling vehicle, though its sales dropped 5 per cent for the year. Sales of the Corolla and Camry rose 5 per cent and 6.6 per cent, respectively.
Nissan’s sales dropped 20 per cent in the fourth quarter but rose 8.7 per cent for the year.
Honda boosted sales for the year despite a sharp drop at the end. December’s tally fell 23 per cent sales rose 8.9 per cent for the year.
The CR-V compact crossover led deliveries, rising 8.3 per cent. The Civic compact and Accord midsize sedans also did well, continuing the dominance of Asian brands in the segment.