GM reclaims sales crown for 2022 ahead of Toyota

The U.S. auto industry finished 2022 much the way it started—a mixed bag—delivering a solid comeback year for a few auto makers and brands but a rough stretch for many others to forget.

General Motors and three of its brands rallied in the final sprint of the year. Stellantis, Nissan Group and American Honda, continue to struggle with lean inventories and supply issues. Ford and Lincoln snapped three-month losing streaks with higher December sales. Toyota Motor Corp. posted slightly higher volume and Hyundai and Kia capped a year of U.S. market share gains with double-digit sales gains in December as industry stockpiles continued to recover, even amid rising interest rates and new-vehicle prices, and the growing prospects of an economic slowdown.

Severe cold and heavy snow across a huge swath of northern states late in the month also likely undermined retail activity as 2022 closed, analysts said.

U.S. auto sales rose slightly in December, helped by moderately higher inventory levels and robust fleet shipments, but capped a year that saw volume drop to around 14 million to the lowest level since 2011. TrueCar estimates fleet deliveries will rise 46 percent year over year to 175,317 across the industry in December.

General Motors, driven by strong light-truck deliveries, reported a 42 percent increase in fourth quarter light-vehicle volume, with sales rising 44 percent at Chevrolet, 42 percent at GMC and 75 percent Cadillac. Buick was the only GM brand to post lower volume in the final quarter of 2022, down 6.5 percent, extending the brand's declines to six consecutive quarters.

GM also reclaimed the title of top-selling auto maker in the U.S. in 2022 by nearly 150,000 units after Toyota Motor grabbed the crown in 2021. GM, the market's longtime leader until 2021, reported U.S. deliveries of 2.258 million last year, up 2.5 percent, while Toyota Motor sales tallied 2.1 million, down 9.6 percent.

GM said U.S. dealer inventories continue to rebound and have more than doubled over the last 12 months, finishing December at 410, 682 units, including cars and light trucks in transit, up from 359,292 at the close of the third quarter and 199,662 at the end of 2021.

December deliveries rose 3.5 percent at Toyota Motor, with a 6.6 percent rise at the Toyota division offsetting a 16 percent decline at Lexus. Both brands continue to be hampered by some of the industry's lowest inventory levels, with Lexus sales now dropping 11 straight months.

At Ford Motor Co., December volume increased 3.3 percent behind gains of 2.7 percent at the Ford division and 17 percent at Lincoln. The No. 3 auto maker in the U.S. finished 2022 with sales of 1.86 million, down 2.2 percent.

Ford said U.S. sales of the F-Series truck tallied 653,957 in 2022, making it America’s best-selling truck for 46 consecutive years and the best-selling vehicle for 41 years straight.

The company said it finished 2022 with gross inventory of 398,000 cars and light trucks, or a 60-day supply, with 45 percent of it in transit, up from 372,000 units at the close of November and 247,000 at the end of 2021. 

Stellantis said fourth-quarter volume skidded 16 percent behind a drop of 18 percent at Jeep, 39 percent at Chrysler and 15 percent at Ram. Only Dodge posted a sales gain, 15 percent, in the final quarter.

Volume also declined 25 percent or more at two of the company's smaller brands: Fiat and Alfa Romeo. Sales at Jeep and Ram, FCA's biggest brands, have now dropped six consecutive quarters. Stellantis' overall U.S. deliveries dropped 13 percent in 2022.

Jeff Kommor, head of U.S. sales for Stellantis' FCA US unit, cited "production constraints and a disruption of parts and materials in general," as well as "market conditions that carried across 2021 into 2022," for negatively impacting the company's results.

Honda Motor Co., still struggling to secure chips for key models to rebuild depleted stockpiles, said December sales dropped 11 percent, with the Honda division down 11 percent and Acura off 5.5 percent. The company's 2022 sales skidded 33 percent, one of the steepest declines among major auto makers last year. The company said it is starting 2023 with about 40,000 new vehicles in inventory and has advised dealers that stockpiles won't return to normal levels untill fall 2023 at the earliest.  

“Like the rest of the industry, we aren’t out of the woods yet with supply issues," said Mamadou Diallo, vice president of auto sales for American Honda Motor Co. "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 Group's fourth-quarter U.S. sales dropped 2 percent to 191,012 vehicles, with the Nissan brand off 3.6 percent, its sixth straight quarterly decline, while Infiniti deliveries rose 24 percent.

Volume jumped 40 percent last month to a December record of 72,058 at Hyundai Motor America, driven by a 27 percent rise in retail deliveries. Hyundai said it was its fifth straight month of record retail sales, with utility vehicles accounting for 74 percent of retail volume.

While it finished the year with five consecutive monthly sales gains, Hyundai's 2022 U.S. sales tallied 724,265, a 2 percent decrease compared with 2021. The company said it ended December 2022 with 37,379 cars and light trucks in U.S. inventory, down slightly from 39,898 in November but up from 21,420 at the close of 2021.

At Kia, sales rose 25 percent to a December record of 60,422, its fifth straight monthly advance. The company posted U.S. sales of 693,549 in 2022, down 1.1 percent from 701,416 in 2021.

Subaru posted its fifth consecutive monthly increase, with December volume up 11 percent but down 4.7 percent for the year. Mazda racked up its third straight monthly gain with a 41 percent increase in December volume, but finished the year down 11 percent.  

Genesis Motor America also reported record December sales—6,172, up 23 percent—helping the brand finish the year with volume of 56,410, up 14 percent.

Volvo is scheduled to release December sales later Thursday, followed by Mercedes-Benz, Porsche and Jaguar Land Rover later in month.

After demand bounced back following the early months of the COVID-19 pandemic, auto makers struggled to rebuild inventories throughout 2022 because of a shortage of microchips and other supply-chain bottlenecks.

Higher interest rates and new-vehicle prices are now making it more expensive for consumers to finance a purchase, forcing some to delay buying or consider a used car, even as job growth remains healthy and consumer confidence rebounds.

"There were fewer giant red bows than dealers would have liked in December," said Charles Chesbrough, senior economist at Cox Automotive. "Given the large improvement in supply levels, it seems likely that rising interest rates are now constraining demand in the retail auto market. With record-high prices and elevated loan rates, the pool of potential new-vehicle buyers is shrinking."

While analysts expect U.S. sales to increase in 2023, the wide range of forecasts—from 14.1 million to 15 million—underscores the clouds hovering over the industry.

"Auto consumers are plagued by an uncertain economic environment, high vehicle prices, higher interest rates, and low inventory levels," said Chris Hopson, principal analyst at S&P Global Mobility.

The seasonally adjusted annualized rate of sales in December is expected to come in at 13 million to 13.3 million, according to forecasts from LMC Automotive, J.D. Power, TrueCar, Cox Automotive and S&P Global Mobility. That would be up slightly from December 2021's 12.9 million pace but the lowest annualized pace of sales since May's 12.73 million rate and June's 13.07 million pace. The SAAR has struggled to top 15 million since July 2021, except for readings of 15.3 million in January 2022 and October 2022.

Retail stockpiles in December tallied more than one million units for the third straight month, J.D. Power and LMC Automotive said, while TrueCar estimates total new light-vehicle inventory, including fleet and commercial stock, stood at 1.8 million in December, up from 1.1 million in December 2021. The brands with the highest stockpiles last month were Buick, Ram, Jeep, Volvo, Infiniti, Jaguar, Dodge, Lincoln Chrysler, Audi and Ford, Cox Automotive said, while Toyota, Kia, Lexus, Land Rover, BMW, Honda, Subaru, Porsche, Hyundai, VW and Acura had the lowest inventory levels. 

December discounts rose slightly compared to November but remain very low. The average incentive per new vehicle was on track to drop 21 percent from December 2021 to $1,187 last month, J.D. Power and LMC Automotive said. Incentive spending per vehicle expressed as a percentage of the average vehicle MSRP was 2.5 percent last month, down 0.8 percentage points from December 2021, J.D. Power and LMC Automotive projected.

TrueCar estimates incentives averaged $1,121 per new vehicle last month, down 41 percent from December 2021 but up 4.5 percent from November.

To counter rising interest rates, some auto makers are waiving payments and down payments for 90 days, or dangling finance rates as low as 1.9 percent for 60 months on certain models for eligible consumers.

"As inventory continues to build, many (auto makers) are starting to feel pressure to incentivize, especially with winter storms and rising interest rates keeping more folks on the sidelines," said Justin Colon, a vice president at TrueCar.

New-vehicle transaction prices continue to rise but at a slower pace than early in 2022. The average transaction price in December was on pace to set a record of $46,382, a 2.5 percent increase from a year earlier, J.D. Power and LMC Automotive said. TrueCar pegged average transaction prices in December at $45,628, up 2.1 percent from December 2021 but up just 0.9 percent from November 2022 levels.

• There were 27 selling days last month, the same as December 2021, but two more than November.
• More consumers are committing to monthly payments of $1,000 or more. Edmunds said 15.7 percent of consumers who financed a new vehicle in the fourth quarter agreed to a monthly payment of $1,000 or more—a record—compared to 10.5 percent in the final quarter of 2021 and 6.7 percent in 2020's final quarter.
• Buyers are placing more money down on a new vehicle to offset rising costs. The average down payment for a new car or light truck hit a record high of $6,780 in the fourth quarter, Edmunds said.
• Fleet sales are expected to total 215,500 in December, up 76 percent from December 2021 on a selling day adjusted basis, J.D. Power and LMC Automotive said, with fleet shipments expected to account for 17 percent of total light-vehicle sales, up from 10 percent a year earlier.
• Leasing accounted for just 18 percent of retail sales in December, J.D. Power and LMC Automotive said.
• Average interest rates for new vehicle loans were expected to increase to 6.4 percent in December, 247 basis points higher than a year earlier, J.D. Power and LMC Automotive projected.

"As we head into the new year, the industry shows signs of reverting to old customs. Markups are being reduced, incentives are inching up and a larger proportion of sales are allocated to rental fleets—all normal indicators after what has been an abnormal few years."—TrueCar analyst Zack Krelle

"Even with the probability of an economic downturn, pent-up consumer demand from the past two years will keep inventory levels relatively low. Therefore, 2023 is likely to be another year of relative healthy pricing and profitability."—Thomas King, vice president of data and analytics at J.D. Power