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A year after becoming the top automaker in the U.S., Toyota Motor North America has slipped back behind General Motors Co.
Plano-based TMNA, the North American arm of Japanese auto giant Toyota Motor Corp. reported Wednesday that year-end U.S. sales decreased 9.6% in 2022 to 2,108,458 vehicles. Detroit-based GM reported sales increased 2.5% last year to 2,274,088 vehicles.
Toyota's production took a hit as an ongoing microchip shortage and high raw materials cost hampered Asian car manufacturers more than their American counterparts. Despite those challenges, demand for Toyota's vehicles remains high, and inventory continues to see "slow and steady" improvement, TMNA executive vice president of Sales Jack Hollis said. He also noted that fuel prices have come down, inflation is slowing, and the price of raw materials has started to de-escalate.
"While we still have many of the 2022 challenges carrying into 2023, we're moving in the right direction," Hollis said. "We're doing whatever we can to get vehicles to our customers as quickly as possible. We're cautiously optimistic about the future."
Cox Automotive projects total vehicle sales in the U.S. in 2022 will total 13.9 million, which puts Toyota at about 15% market share. Hollis said he expects about 15 million vehicles to be sold in 2023 while transaction prices will moderate. Hollis said in November he believes there are "closer to 16 million to 17 million buyers out there," but the industry cannot keep up with demand.
Despite TMNA's sales decline last year, Senior Vice President of Automotive Operations Andrew Gilleland said he remains encouraged because of the growth the company experienced in the fourth quarter and December. The company reported U.S. fourth-quarter sales of 536,740 vehicles, an increase of 13.1%. In December, sales increased by 3.5% to 180,147 vehicles.
Gilleland also said the company remains unaffected by falling behind GM because surpassing its competitor was never a specific goal.
"I think it was just a function of our ability to rectify our supply chain a little bit quicker," Gilleland said of last year's move to the top ranking. "It certainly was never a goal where any of us sat around and were like, 'Gee, let's beat GM.'"
Last year TMNA introduced 20 new, refreshed or special edition vehicles between the Toyota and Lexus brands. This year, the company plans to have 23 new, refreshed or special editions hit showrooms. Of those, 14 will be under the Toyota brand, and nine will be under Lexus. Among the all-new vehicles being released this year include the Prius, Crown and Grand Highlander.
Cox Automotive expects the economy to see weak growth as the Federal Reserve tightens monetary conditions and consumers wrestle with high-interest rates. New vehicle sales are forecast to increase modestly versus 2022, while affordability will continue to be a challenge for vehicle buyers in the year ahead.
"This December, there were fewer giant red bows than dealers would have liked," 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."
Hollis said affordability will be a question throughout the year. While transaction prices have moderated, he said interest rate hikes and fear of a recession are limiting demand. However, he said people will still need to buy new cars because the average age of a vehicle in the U.S. is currently about 12 years old.
"It's not like demand is going anywhere," Hollis said. "It’s how quickly it will be delivered on."
