Wild Ride of US Auto Sales in 2022 below 1977. Graphics for GM, Toyota, Ford, Stellantis, Hyundai-Kia, Honda and Nissan oh Dear

Who got chips and who didn’t: Hyundai-Kia sales near all-time high in 2022, Honda sales collapsed.

For wolf richter for WOLF STREET.

The thing about new car sales in the US is that even in good years, they’re bad, and in bad years, they’re terrible.

In 2022, total new vehicle deliveries to retail customers and fleets (dominated by rental fleets) fell 8% from an already dire 2021, to 13.7 million vehicles, below where deliveries had been in 1977, 16.4% less than the peak in 2016, and 20.8% less than the previous peak in 2000. This represents 45 years of stagnation with sharp falls in between.

The way automakers have managed to increase their revenue dollars for decades in this environment of stagnant or falling unit sales is to sell more expensive vehicles, moving up a class with ever fancier, more advanced vehicles, with Better performing, more efficient, better equipped and safer vehicles, I mean, even the base F-150 pickup now has a 10-speed automatic, that kind of thing.

But already years ago, the rise in range and ever-higher prices began to contribute to stagnation, as there seems to be a shortage of higher-end Americans.

But 2022 was very special: a shortage of chips and a shift in demand towards fuel-efficient cars.

The semiconductor shortage started to hit at the end of 2020, got much worse in 2021 and lasted until 2022, and is still going on, albeit to a lesser extent.

In this environment, when automakers were able to get the semiconductors they needed, were able to build vehicles and sell them, and their sales were strong – Toyota through September 2021, Hyundai and Kia in 2021 and 2022 – it’s good to have great relationships with manufacturers. of Korean semiconductors. And when they ran out of one of the thousands of semiconductors in a model, they couldn’t build this model and there was nothing to sell, dealer inventories ran out and their sales plummeted: Honda and Toyota in 2022. The big manufacturers of American cars had problems at all times.

Additionally, fueled by rising gasoline prices in early 2022, vehicle demand suddenly shifted to fuel-efficient vehicles, especially small and midsize cars and compact SUVs, and to electric vehicles from legacy automakers that couldn’t build enough. Supply chains and production were not ready to adapt to this change.

Thus, inventory shortages have shifted in 2022 away from pickup trucks and SUVs, which disappeared from dealer lots in 2021 and of which there is now ample supply, to fuel-efficient vehicles, with dealers running out of those vehicles by 2022.

Overall inventory through November reached 1.64 million vehicles, but was still down 54% from November 2019, according to data from Cox Automotive:

The shortage caused price spikes.

In classic fashion, the MSRP is set before new model vehicles arrive at the dealership and will not change after that for the entire model year. In normal years, automakers and dealers stack discounts, dealer incentives, and customer rebates to spur sales (Tesla, which sells direct, is the exception; it changes prices on its website each time it does). .

But in 2021 and 2022, these discounts, dealer incentives, and customer rebates disappeared, and dealers were able to sell vehicles for thousands of dollars above MSRP, because Americans who could afford them were suddenly willing to pay anything, what they rarely do in normal times

Also, automakers that could only build a limited number of vehicles due to chip shortages prioritized their most expensive models and raised prices. And so I ended up writing this crazy article: $1,768 a month, $10,407 down, 5% APR, on a Ford truck? Third Quarter New Vehicle Financing Update.

And as a result, average transaction prices after all additional stickers and incentives increased 33% in three years, from $34,900 in December 2019 to $46,400 in December 2022, according to JD Power. That price increase has now leveled off.

The graph shows the average transaction prices in June and December of each year; the green line connects the decembers. Also note how the normal seasonality, a mid-year drop in average transaction prices, has disappeared entirely recently:

The Wild Ride of the seven largest US automakers.

Note: The first four charts, the big four, are on the same scale to show their sales relative to each other. The remaining big three automakers don’t sell enough to show on these charts, and each has its own scale.

general motors: Sales increased 2.5% year-over-year to 2.274 million vehicles. But this was 26% below its recent peak in 2015, after falling in 2020 and 2021, and after falling sales in each of the previous four years:

Toyota: During the first half of 2021, Toyota had an abundant supply of semiconductors thanks to its special contracts with its suppliers. But then it too sold out, and in September 2021, it began to run out of vehicles. However, the strength through the first three quarters in 2021 was enough to make it No. 1 in the US for the first time.

In 2022, after a series of production cuts, inventory disappeared and sales fell 9.6% to 2.11 million vehicles, down 16% from the recent 2015 peak:

Ford: Sales fell another 2.2% year-over-year, the seventh consecutive year-over-year decline. Since the recent peak in 2015, sales have plummeted 28%:

Stellar (FCA US): Sales fell 13% year-over-year and have plunged 32% since the recent peak in 2015:

The charts below for the three remaining big automakers in the US are each on their own scale.

Hyundai-Kia: The one who can get the tokens can build vehicles and has something to sell. It helps that other Korean companies are world powers in semiconductor production. So combined Hyundai-Kia sales hit an all-time high in 2021 and fell 1.5% from that record in 2022, to 1.42 million vehicles:

sling: Like Toyota, it was able to get through 2021 in reasonably good shape, but was hit hard by semiconductor shortages in late 2021 and into 2022, and sold out, with sales collapsing 33% year-over-year, a less than 1 million vehicles, 40% less than the 2017 peak:

nissan: Sales plummeted 25% year-over-year to 729,000 and 54% from the 2017 peak. The company was already in big trouble before the pandemic, and sales fell 16% in the two years since the peak of 2017 to 2019. The pandemic and chip shortage hit it even harder:

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