General Motors is showing that the end of its nine-decade reign as the U.S. sales leader was just a one-year blip, not a groundbreaking shift in the industry’s pecking order.
For a second consecutive year since, GM is solidly No. 1 at the halfway point. And the automaker is widening its lead over second-place Toyota amid signs that the market is strengthening.
Through June, GM outsold Toyota Motor North America by nearly 250,000 vehicles, far more than the roughly 42,000 that separated the two in mid-2022, according to the Automotive News Research & Data Center.
The supply constraints that helped Toyota unseat GM in 2021 and that have hindered production throughout the industry for two years are easing, boosting inventory to feed pent-up demand from both fleet and retail buyers, analysts said.
Signs point to continued improvement in the second half of the year. The seasonally adjusted, annualized rate of sales was 15.8 million vehicles in June, at the high end of forecasters’ estimates and the third-highest of the year, according to Motor Intelligence. That’s an improvement from 15.1 million in May and 13.1 million a year earlier, when shortages of semiconductors and other key parts had dealers starving for products.
The robustness of the market has prompted Cox Automotive and other forecasters to increase their sales outlooks. GlobalData, which started the year projecting U.S. sales of 14.9 million vehicles, last week raised its projection to 15.4 million.
Light-vehicle sales climbed 18 percent in the second quarter, with all major automakers that reported as of Friday, July 7, posting higher sales. Mercedes-Benz and JLR had not yet reported their results. Demand remains consistent, even as rising prices and interest rates contribute to economic uncertainty about the rest of the year, several automakers and analysts said.
“The U.S. auto market is one of the top outperforming markets in the world currently, as consumers display fortitude in the wake of the pandemic and with economic and market risk on the horizon,” Jeff Schuster, automotive group head at GlobalData, said in a statement.
Schuster said the forecast for the year “has the ability to push through 15.5 million units if risk dissipates.”
GM’s brands are benefiting from strong customer demand, including for premium trucks from Chevrolet and GMC and small crossovers such as the redesigned Chevy Trax, Steve Hill, vice president of GM’s commercial growth strategies and operations, said in a statement. GM’s U.S. light-vehicle sales rose 19 percent in the second quarter to 689,095, with double-digit gains for all four brands and from retail as well as fleet customers.
“This kind of growth at both the premium and mainstream ends of the market is unmatched, and combined with our industry-leading quality, it’s driving sales and share growth across all our brands and for our dealers in the first half,” Hill said.
Toyota sales were up 7.1 percent in the quarter, with Lexus up 22 percent and the Toyota division up 5 percent. The automaker said inventory remains tight but is improving. Toyota reported 167,666 vehicles from both brands in stock, or a 22-day supply, at the end of June, up from 153,742 on hand to start the month.
“We really haven’t experienced any change in demand after the interest rate hikes and the uncertainty that’s out there in the economy, which is really shocking because rates have gone up a lot,” said Dave Christ, head of the Toyota division at Toyota Motor North America. “Between that and just overall transaction price increases in the industry, it’s been a double whammy on customers. We haven’t seen [any decrease in consumer demand], but we’re keeping a close eye out for any change.”
The industry’s average new-vehicle transaction price, while still historically high, was expected to hold flat in June, forecasters said. Pricing peaked at $47,362 in December, J.D. Power and GlobalData said.
Sending more vehicles to fulfill fleet demand might help automakers maintain higher retail prices at dealerships longer, said Tyson Jominy, vice president of data and analytics at J.D. Power.
“In short, it is an ability to get back to producing at a higher level that is helping to drive this,” Jominy said of the auto market halfway through the year. “At a fundamental level, the industry has both ongoing demand, which we see month to month, and then we have the pent-up demand from the past three-plus years that we haven’t been able to meet.”
Close to half of that pent-up demand is fleet customers, Jominy said. J.D. Power estimated that fleet sales rose 54 percent in June, to 276,000 vehicles, and 58 percent in the second quarter, to 824,000. By comparison, retail sales grew 17 percent in June and 11 percent in the second quarter, which itself is “very strong,” he added.
Which automaker ultimately tops the U.S. sales charts in 2023 will depend on production and supply, Jominy said.
“Who is selling, who is doing better,” he said, “ultimately comes down to who has the most vehicles.”
Larry P. Vellequette contributed to this report.