(Reuters) – U.S. new vehicle sales are expected to decline for major automakers in 2022 due to inventory shortages, which weighed on Asian brands more than the Detroit giants such as General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co.
Full-year U.S. auto sales are forecast to be about 13.9 million units, down 8% from 2021 and 20% from the peak in 2016, according to industry consultant Cox Automotive.
Inventory shortages, caused by surging material costs and persistent chip shortage, spilled into 2022, hobbling production at many automakers. Tight supplies kept car and truck prices elevated, even as auto inventory improved in the second half of the year.
Toyota Motor (NYSE:TM) Corp has been among those hit acutely by parts shortages, which forced the Japanese company to cut its full-year production target in November.
The cutback will lead to the company ceding its spot as the top-selling U.S. automaker in 2022 to GM, which gave up that position at the end of 2021 for the first time since 1931, according to Cox Automotive and automotive marketplace TrueCar (NASDAQ:TRUE).
GRAPHIC : U.S. auto sales over the years – https://www.reuters.com/graphics/USA-AUTOS/lgpdkkydqvo/chart.png
GM’s 2022 U.S. sales are set to rise 2.3%, while Toyota’s is expected to fall 9%, according to Cox Automotive. Both automakers are set to report sales figures on Wednesday.
Some industry observers fret that price hikes by automakers to blunt inflationary pressures and rising interest rates will take a toll on new vehicle sales in the new year.
“We expect 2023 to carry a high level of risk and uncertainty as several markets could be dealing with a recession,” said Jeff Schuster, president of global forecasts at LMC Automotive.
Automakers will need to begin incentivising buyers, a trend that was briefly paused during the pandemic as manufacturers and dealers struggled to fulfill demand, TrueCar said.