Toyota overtakes GM in US sales for the first time – but there’s a catch

In a historic turning point, Toyota Motor North America took the crown of U.S. sales from General Motors for 2021 after the semiconductor chip shortage severely hampered GM’s ability to build enough new vehicles to meet demand. request.

On Tuesday, GM and Toyota both released new car sales results for the fourth quarter and full year and, as many analysts had predicted, Toyota topped GM in both categories. GM has been the market leader since the Great Depression, according to Automotive News.

GM said its fourth quarter sales fell 43% to 440,745 vehicles sold from the last year quarter. For the year as a whole, GM’s new vehicle sales in the United States fell 13% to 2.2 million new cars sold.

Meanwhile, Toyota said it sold 474,378 new vehicles in the fourth quarter, down 28% from the previous year. For the year as a whole, it sold 2.3 million vehicles, a gain of 10.4% from 2020. Toyota’s biggest sellers were the Camry sedan, RAV4 and Highlander SUVs. and the Tacoma pickup.

But Toyota’s victory is likely an anomaly, said Jessica Caldwell, executive director of Insights for Edmunds.

“While Toyota is to be congratulated on this achievement in the face of the Detroit Three’s historic dominance in auto sales, the company shouldn’t be too comfortable in the top spot,” Caldwell said. “This is unlikely to happen again as 2021 has been an extraordinarily unusual year.”

But in its sales release, Toyota executives said the company was able to continue to generate strong sales.

“Despite a second consecutive year of challenges, TMNA ​​has focused on delivering an exceptional customer experience, and we remain optimistic as our electrification strategy continues to evolve,” said Jack Hollis, vice-president. senior chairman of Toyota Motor North America’s auto operations group, in a statement. “Thanks to our phenomenal dealers and world-class purchasing and manufacturing teams, our inventory continues to improve and we are preparing to introduce 21 all-new, refreshed and special-edition vehicles in 2022.”

Ford Motor Co. reports its results on Wednesday. Stellantis figures were due later on Tuesday.

GM’s best sellers

GM sales were supported by full-size Chevrolet Silverado and GMC Sierra pickup trucks, which sold a combined total of 778,689 units for the year. But they haven’t exceeded last year’s sales. GM sold 248,924 Sierra this year, down about 2% from what it sold in 2020. Similarly, Silverado sales were 529,765, down 11% from 2020.

GM’s president for North America, Steve Carlisle, said the automaker is poised to regain market share in the coming year.

“In 2022, we plan to build on the strength of the economy and the expected improvement in semiconductor supplies to increase our sales and market share,” Carlisle said in a statement. in North America with the launches of the GMC HUMMER EV, Cadillac Lyqiq and the revelations of the Chevrolet Silverado EV and GMC Sierra EV. “

All automakers have struggled in 2021 to maintain new car production amid the chip shortage that began in February.

Following:Everything you need to know about the auto manufacturer’s chip shortage

GM hit second-half new vehicle sales hard due to low inventories and production delays as the automaker waited for chip parts. Chips are a key component in a variety of auto parts.

Renaissance Center at sunset in downtown Detroit.

To maintain inventory, GM has manufactured some vehicles without certain amenities such as wireless charging technology or automatic stop / start, the feature that turns the engine off when a driver stops at an intersection and then restarts it. automatically when the driver presses the accelerator.

But GM saw some bright spots in the quarter and for the full year, especially with its strategy of directing any chip parts it could get to factories that make its vehicles more profitable. These include large SUVs such as the Cadillac Escalade and its full-size pickup trucks.

Escalade sales increased for the quarter and for the year as a whole. For the quarter, Cadillac sold 9,664, a gain of 2% from the previous year quarter. For the year as a whole, GM saw sales of its redesigned Escalade increase 65% to 40,505 units sold. The Chevy Tahoe and Trailblazer SUVs were also good sellers. For the year, GM sold 106,030 Tahoe, a gain of 20%, and GM sold 90,161 Trailblazers compared to 34,292 in 2020.

Sales of the all-electric Chevrolet Bolt also rose 20% to 24,828 units sold despite GM having to stop production in late summer at Orion Assembly in Orion Township due to a Global Bolt Recall 2017-22 due to faulty batteries that could cause a fire threat. The production halt hurt Bolt’s sales in the fourth quarter, with GM selling just 25, down from 6,701 cars a year ago.

GM’s results follow a rough 2020 year. GM’s new vehicle sales fell 11.8% for the full year of 2020 compared to 2019, largely due to the eight-week pandemic-induced shutdown that year. Rival Toyota announced that its sales in the United States were also down 11.2% in 2020 compared to 2019.

Toyota at the top

While Toyota overtook GM in sales in the second and third quarters of last year, it has never beaten GM in full-year sales so far, said Michelle Krebs, executive analyst for Cox Automotive. Krebs said data from Ward Automotive dates back to 1961 and showed GM to be the sales leader every year – although it has been beaten in some neighborhoods – since that date.

Toyota’s success comes from good management of tight inventory all year round, Krebs said. And it has seen strong sales in its Toyota brand as well as its luxury brand Lexus, she said.

Toyota has stockpiled computer chips as well, which has helped it avoid some of the production pitfalls that plagued the Detroit Three at the start of the chip shortage, Krebs said.

Following:Toyota’s chip management provides lessons for GM, Ford and others

“However, the chip shortage caught up with Toyota in the fall when it drastically reduced global production,” Krebs said. “What also became clear during the year is that Toyota has an extremely efficient distribution system that allows it to increase sales even when it has one of the lowest inventory. “

Warren’s Golling Toyota saw its new car sales skyrocket in 2021. It ended the year selling 722 new cars, up from 520 in 2020, said Melissa Tomassi, director of new car sales. Tomassi attributes the increase in sales to the aggressive leasing and reliability of Toyota vehicles.

Melissa Tomassi, director of new car sales at Warren's Golling Toyota, said the store's new and used vehicle sales both increased in 2021 compared to 2020.

“Then there is a generational change,” said Tomassi. “Millennial shoppers and Gen Z shoppers are looking for security, the cheapest payment… so do.

Tomassi said consumers can get a three-year lease on a 2022 Toyota Tacoma 4X4 pickup for less than $ 300 per month with $ 750 down payment. This includes maintenance for two years.

According to TrueCar, a similar lease on a 2022 Chevrolet Silverado 1500 costs over $ 500 per month and $ 2,000 is due upon signing.

But Edmunds’ Caldwell said GM has positioned itself for future leadership. GM is investing $ 35 billion in electric vehicles and autonomous technologies through 2025, which should prepare the automaker for “the changes expected in the transportation industry this decade and beyond,” Caldwell said.

Less inventory at Chevrolet

Paul Zimmermann is a partner at Matick Automotive, which owns Matick Chevrolet in Redford Township and Matick Toyota in Macomb. He said Toyota was slightly better positioned to deal with the chip shortage last year.

“Going back to the 2011 tsunami in Japan, Toyota moved away from the just-in-time manufacturing process and started stocking more parts,” Zimmermann said. “So they had stockpiled and had a little bit of chip parts to weather the storm until the end of the second quarter and the start of the third quarter compared to the rest of the manufacturing base. “

Matick Chevrolet saw an estimated 80% reduction in inventory while Matick Toyota saw its inventory drop by approximately 50%, Zimmermann said.

Matick Chevrolet vice president and owner Paul Zimmermann stands in an empty row among other spaces where new vehicles would be parked in a lot at Matick Chevrolet in Redford on Monday, May 3, 2021.

Industry-wide, new vehicle sales in December are expected to reach 1.10 million units, down 32% from December 2020, according to a forecast from Cox Automotive.

For the year as a whole, new car sales are expected to reach around 15 million, according to the Kelley Blue Book vehicle tally. That’s a 2.5% increase from the 14.5 million in 2020, but well below the five-year average of 17.3 million the industry experienced from 2015 to 2019, Cox noted. Automotive.

“While sales in the first half of 2021 were relatively strong, the industry ran out of vehicles and sales stagnated in the second half,” said Charlie Chesbrough, senior economist at Cox Automotive. “Total sales in the second half of 2021 were the slowest in a decade. Demand is healthy, but supply and production disruptions have kept the industry under control. You can’t sell what you don’t have.

Following:GM, LG sued for consumer fraud in Chevrolet Bolt recall

Contact Jamie L. LaReau at 313-222-2149 or Follow her on twitter @jlareauan. Read more on General Motors and subscribe to our automotive newsletter. Become a subscriber.

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