GM reports gains in full-year sales, but experts say car buyers to see deals in 2023
General Motors reported a sales gain for the fourth quarter and all of 2022 in what has been a turbulent year as parts shortages kept inventory levels low, hobbling new car sales in the first half only to recover later in the year to help the automaker hang onto its U.S. sales crown.
GM said Wednesday its fourth-quarter U.S. sales, when compared with the year-ago period, were up 41% to 623,261 new vehicles sold. For the full year, GM's new vehicle sales in the U.S. rose 3% to 2,274,088 new cars sold compared with 2021. A large part of those gains came on replenishing inventory of pickups and SUVs, which are GM's big sellers and profit-makers. GM said it sold a total of 1.1 million full-size pickups, midsize pickups and full-size SUVs for the year.
GM also announced Wednesday:
- The new 2024 Chevrolet Trax subcompact will start at $21,495 when it arrives at dealerships in the spring.
- Factory Zero in Detroit and Hamtramck will restart production this month building the GMC Hummer SUV expected to launch midyear.
- Production of the Chevrolet Bolt EV and Bolt EUV, built at Orion Assembly, will increase to more than 70,000 units this year to meet strong global demand.
“GM is carrying strong momentum in North America into 2023," said Steve Carlisle, GM executive vice president and president of GM North America. "We see opportunities to grow our EV market share with nine all-electric models on sale, expand our truck leadership with four new Chevrolet and GMC heavy-duty and midsize pickups, and win new customers with the affordable and stylish 2024 Chevrolet Trax, which is the best entry-level vehicle we’ve ever built.”
A return to normal?
A year ago, GM saw sales plummet in the quarter and for the full year, allowing Toyota Motor North America to steal the sales crown from GM for the first time since the Great Depression. GM narrowly won back the title in the second quarter this year, despite reporting a sales decline at that time.
But Toyota was hit hard by parts shortages this year, which forced the automaker to cut its full-year production target in November. On Wednesday, Toyota reported it sold 2,108,458 cars for the year, a 9.6% decline from the year-ago period, with electrified vehicles making up nearly a quarter of the carmaker's total sales volume. For the fourth quarter, Toyota's sales rose 13.1% to 536,740 new vehicles sold.
But industry experts said look for 2023 to deliver a dose of normalcy to consumers again in what has been abnormal years. That means the markups over sticker that dealers were charging will be reduced and some incentives will likely be offered again.
“Cox Automotive’s most recent data shows days of supply of new vehicles is now at 56 days, having moved three days higher just during the holidays. Supply has really started to improve in recent months, but sales have not followed, and days’ supply is rising quickly as a result,” said Charlie Chesbrough, Cox Automotive senior economist. “It seems more and more likely that incentives will start ramping up in the first quarter to stimulate some demand.”
Fleet helped boost sales
The automaker said 2022 was the best year for commercial sales since 2006 with sales to fleets up 101% in the fourth quarter and up 44% for the year. Fleet was 21% of sales mix, GM said.
GM touted its pickup sales, saying it is the pickup sale leader when adding together all the full-size and midsize pickups it sells across its GMC and Chevrolet brands. But Ford’s F-Series is traditionally No. 1 in the three-way sales race between the Ford, Ram and Chevrolet brands.
TrueCar forecast GM's 2022 average transaction price year-over-year would dip 2.5% to $52,568.
Stellantis is expected to report its fourth-quarter and full year results Wednesday and Ford reports on Thursday.
Big brand winners and losers
Among its brands, only Buick was down for both the year and the quarter. Cadillac rose almost 75% for the quarter and 14% for the year led by gains in the performance CT4 and CT5 sports sedans. Cadillac also saw a gain in sales of the XT4 small SUV.
Chevrolet was up almost 43.3% for the quarter and 5.6% for the full year. But sales of the Silverado pickup dipped 1.2% for the full year to 523,249. Sales of the Equinox SUV rose 28% to 212,072 for the year. And who says the sedan is dead? The Malibu saw a 193.2% boost in sales to 115,467 for the full year, likely going to rental car fleets as GM replenished inventory when more parts became available.
GMC increased almost 42.3% for the quarter and 7.3% for the year. Buick sales slipped 6.5% for the quarter and plummeted 42.4% for the year.
The automaker highlighted its Chevrolet Bolt EV and EUV sales, which had their best sales year ever up 53.5% for the year to 38,120 sold. A large part of that gain has to do with the year-ago comparison when GM halted Bolt production because of a global recall on all Bolts because they had faulty batteries that could catch fire. But along with building more of them this year, GM is also raising the price on both by hundreds of dollars due to inflationary pressures.
Changes ahead for car sales
The year ahead promises to continue to be robust for new car sales, but the nature of those sales may shift, some industry observers say.
"Auto demand faces headwinds in 2023," said Michelle Krebs, executive analyst at Cox Automotive. "High vehicle prices compounded by interest rates that are continuing to rise are causing the monthly payment on an auto loan to rise. That will push some buyers out of the market because the math simply won’t work."
Any price hikes by automakers aimed at mitigating inflationary pressures and rising interest rates will ding some new vehicle sales in 2023 so it may mean offering incentives again. Many carmakers largely abandoned that practice during and after the pandemic as they struggled to get parts to meet demand.
"As inventory continues to build, many OEMs are starting to feel pressure to incentivize, especially with winter storms and rising interest rates keeping more folks on the sidelines," said Justin Colon, vice president of Original Equipment Manufacturer Solutions at TrueCar.
Krebs agreed, saying there has been some buildup in inventory, especially for full-size pickups at the domestic automakers, but "we anticipate we will see incentives reintroduced to lure buyers."
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Contact Jamie L. LaReau: firstname.lastname@example.org. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.