General Motors continues to extend its lead over Toyota in the US automotive market, driven by improved supply conditions and a strengthening market.
General Motors (GM) has reaffirmed its position as the leading automaker in the US market, surpassing Toyota for the second consecutive year. With a considerable sales lead and signs of a growing market, GM’s success is attributed to the alleviation of supply constraints and increasing pent-up demand. In this article, we explore the factors behind GM’s sales growth and the optimistic prospects for the upcoming months.
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GM has outperformed Toyota Motor North America by nearly 250,000 vehicles during the first half of the year, marking a substantial increase compared to the approximately 42,000 vehicle gap in mid-2022 (according to the Automotive News Research & Data Center). The easing supply constraints have enabled GM to meet the pent-up demand from both fleet and retail buyers, contributing to its widening sales lead.
The US automotive market is displaying signs of improvement, evident in the seasonally adjusted annualized rate of sales. In June, the sales rate reached 15.8 million vehicles, surpassing expectations and ranking as the third-highest figure of the year (Motor Intelligence). This positive trend follows May’s 15.1 million and the previous year’s 13.1 million, which were hampered by semiconductor shortages and component supply challenges. The encouraging market conditions have led industry forecasters, including Cox Automotive and GlobalData, to revise their sales projections upwards. GlobalData, for instance, raised its initial US sales projection from 14.9 million to 15.4 million vehicles.
In the second quarter, light-vehicle sales increased by 18 percent across major automakers, demonstrating consistent demand in the US market. Despite concerns about rising prices and interest rates, consumers have shown resilience in the aftermath of the pandemic. Jeff Schuster, automotive group head at GlobalData, highlights the US auto market as one of the top-performing markets globally, emphasizing consumer fortitude despite economic and market risks. Schuster also suggests that the sales forecast for the year could surpass 15.5 million units if risks dissipate.
GM’s diverse brand portfolio has benefited from strong customer demand. The company has witnessed remarkable growth, particularly in the premium truck segment with Chevrolet and GMC models, as well as in small crossovers like the redesigned Chevy Trax. GM’s US light-vehicle sales increased by 19 percent in the second quarter, reaching 689,095 units. All four GM brands experienced double-digit gains, both in retail and fleet sales, thanks to a combination of unmatched growth in the premium and mainstream segments and industry-leading quality.
Toyota reported a 7.1 percent increase in sales for the quarter, with Lexus recording a remarkable 22 percent growth and the Toyota division experiencing a 5 percent rise. Although inventory remains tight, Toyota has seen improvements, with 167,666 vehicles from both brands in stock by the end of June, representing a 22-day supply—an increase from the previous month’s inventory.
The ultimate determination of which automaker will secure the top position in the US sales charts for 2023 will depend on production capabilities and supply availability. According to Tyson Jominy, Vice President of Data and Analytics at J.D. Power, having a substantial vehicle inventory to meet market demands and sustain higher retail prices is crucial. Fleet sales, accounting for a significant portion of pent-up demand, have witnessed a substantial surge, while retail sales have also shown strong growth.
Source: AutoNews (subscription required)
