General Motors reported lower U.S. sales in the first quarter on Friday as it and the rest of the auto industry continue to grapple with a global shortage of semiconductor chips and other market disruptions. production.
For the quarter, GM said it sold 512,846 vehicles, down 20.1% from the 642,250 new vehicles sold a year ago. But its rugged Michigan-made pickup trucks saw a surge in sales as GM managed to direct chip parts to Flint Assembly to keep production running.
The chips are used in a variety of auto parts and the shortage has crippled new car production since this time last year.
The chip shortage hurt GM last year to the point that, in a historic turning point, Toyota Motor North America won GM’s U.S. sales crown for 2021. GM had been the nation’s auto sales leader for decades.
On Friday, Toyota said its first-quarter sales beat GM again with 514,592 sales, down 15.8% from the year-ago quarter, when Toyota sold 603,066 new vehicles.
The victory was narrow, but “Toyota has been struggling with some of the lowest inventory in the industry, so it’s miraculous that it’s still the best-selling automaker in the United States,” said Michelle Krebs , executive analyst at Cox Automotive.
Along with strong sales of its Chevrolet Silverado and GMC Sierra full-size pickup trucks, GM also saw strong sales increases of its full-size SUVs such as the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade. GM’s management team funneled the chip parts to the Arlington, Texas assembly plant, where the popular high-performance large SUVs are made.
“Our ability to meet pent-up demand has improved significantly thanks to the tremendous efforts of our supply chain and manufacturing teams to keep our factories operating at near-normal levels,” said Steve Carlisle, executive vice president and president of GM North America. “Supply chain disruptions are not entirely behind us, but we expect to continue to exceed 2021 production levels, particularly in the second half.”
Ford Motor Co. reports first-quarter sales on Monday, and the auto industry as a whole is expected to see lower sales.
Edmunds.com projects 3,296,280 new cars and trucks will be sold in the United States in the first quarter, down 15.2% from a year earlier, but up 0.4% from the fourth. trimester.
“Soaring gas prices were the number one concern for consumers in March, but a lack of inventory is what ultimately depressed new vehicle sales in the first quarter,” said Jessica Caldwell, chief executive of the information at Edmunds.
Automakers face continued disruptions to supply chains and production created by the chip shortage and COVID-19. Earlier this month, GM announced it would idle the Fort Wayne, Indiana assembly plant, which builds the Silverado and Sierra full-size light-duty pickup trucks, for two weeks beginning April 4 in due to a shortage of chip parts.
Through the end of March, the global auto industry lost production of about 1.1 million new vehicles this year due to the semiconductor supply problem, according to AutoForecast Solutions.
Beyond this issue, the industry faces possible further supply chain disruptions due to the Russian invasion of Ukraine.
“This combination of headwinds could mean that these inventory issues will persist for the rest of the year,” Caldwell said.
GM estimates total first-quarter light-vehicle sales trend 14.1 million new-car sales, up from 16.8 million a year ago. This is because of declining inventories and production levels.
But GM chief economist Elaine Buckberg said she expects the industry’s light-vehicle volume to improve and surpass 2021 levels due to the strong labor market. , increased vehicle production and pent-up demand.
“Normally, such a strong US economy would translate to light vehicle sales in the 17 million range,” she said. “Supply chain improvements should boost auto sales this year, despite headwinds from rising inflation and fuel prices.”
Continued:Looking for a new car? Prepare for a small selection, no negotiation
GM’s first-quarter market share is expected to drop significantly from a year ago, Krebs said. The chip shortage hit GM “hard and early,” affecting its biggest sellers such as the Silverado and Sierra pickup trucks and the Chevrolet Equinox midsize SUV, she said.
Krebs said Cox can’t calculate market share until all automakers report quarterly sales.
GM said it had its best commercial fleet quarter in nearly three years. In the commercial market, sales of full-size pickups increased by 5%, those of compact SUVs by 131% and those of midsize pickups by 23%.
Commercial fleet activities accounted for about 24% of its first-quarter sales. It was up 10% year over year, with sales to commercial and government fleets up 14% and 18%, respectively.
GM’s total sales of all Silverado models fell 4.3 percent to 121,107 and of Sierra pickup trucks fell 10 percent to 56,617.
But heavy duty models took over the pickup truck segment for GM. Silverado heavy-duty pickup sales jumped 11.1 percent to 37,779 and Sierra heavy-duty pickup sales jumped 12.2 percent to 19,812.
According to data from JD Power PIN, the combined retail market share of heavy-duty pickup trucks was a segment-leading 41.5% during the quarter. This is an increase of 10 percentage points from a year ago and GM’s strongest quarter in terms of truck retail market share in more than a decade. the company said.
For light-duty pickups, Silverado sales fell 10.7% to 81,017 and Sierra sales fell 18.7% to 36,805. But they have a combined retail market share of 42%, in up 2.6 points year-over-year, according to JD Power PIN.
For full-size SUVs, Cadillac Escalade sales increased 6.7% to 10,505, Chevy Tahoe sales increased 4.1% to 23,979, Suburban jumped 11.% to 12,424 and GMC Yukon sales climbed 15.4% to 21,296.
Chevrolet Tahoe sales to government customers increased 243%, GM said. GM makes a Tahoe police vehicle.
But sales of GM’s midsize SUVs and sedans were a different story, though that’s not surprising given that the automaker produced fewer of these vehicles, having had to slow production at the plants that build these vehicles due to chip shortages.
Take Buick, a brand comprised of small and midsize SUVs. For the quarter, Buick said sales fell 58.2 percent to 19,146 total vehicles.
The Escalade was the only vehicle in the Cadillac lineup to sustain sales. The brand recorded a 24.3% drop in sales to 28,216 vehicles sold during the quarter.
GMC reported sales fell 7.5% to 121,437. Its Acadia midsize SUV sales fell 53.2% to 9,336.
Chevrolet sales fell nearly 20% to 344,033. Sales of the 2022 Chevrolet Bolt fell 96% to 358 after GM halted production of the cars at the Orion assembly plant at the late last year to focus on repairing faulty batteries in 140,000 Bolt electric and EUV vehicles from model years 2017 through 22 as part of a global recall.
On a more positive note, in addition to strong pickup truck sales, Chevrolet saw sales of the Corvette sports car jump 33.3% to 8,811. The volume is small, but it’s a very profitable and very publicized for the brand.
During the quarter, GM sold 99 units of the new 2022 GMC Hummer EV pickup.
At a media event in Phoenix earlier this week, Buick and GMC boss Duncan Aldred said GM expected small sales for the Hummer in the quarter, in part because GM was still using pre-production materials to build it until recently.
The production ramp-up is crucial because GM’s electric vehicle sales will be determined by production, analysts said.
“Electric vehicles are really niche models, at least the Hummer,” Krebs said. “It all depends on what can be produced.”
GM CEO Mary Barra told analysts on a fourth quarter earnings call that GM expects to sell 400,000 electric vehicles by January 2024. Those sales will come from the Hummer EV and SUV, Chevrolet Silverado EV 2024, of the 2023 Cadillac Lyriq under construction. SUVs, the 2022 Chevrolet Bolt EV and EUV and the yet to be unveiled 2024 Equinox EV.
GM also has its new venture, BrightDrop, which lists FedEx and Walmart as customers. It manufactures and sells the EV EV600 and smaller EV410 commercial vans at GM’s CAMI plant in Ontario. These minivans will increase GM’s electric vehicle sales in the future.
The Hummer is built at Factory ZERO in Detroit and Hamtramck. It is the first electric vehicle to use GM’s Ultium platform, which is a proprietary battery cell platform that powers electric vehicles. The Hummer is a flagship vehicle for GMC and GM.
GM received more than 66,000 reservations for Hummer pickup trucks and SUVs, higher than initial expectations, said Chad Lyons, a GMC spokesman. Also higher than expected was the number of people converting their reservations into orders to buy the Hummer pickup — around 95%.
The limited-build Hummer “Edition 1” now starts at $110,295, but GM will offer versions priced around $80,000 to $100,000 in the future. Aldred told reporters that GM will ramp up production of the Hummer pickup throughout this year and it will be at full throttle in the fourth quarter.
Continued:GM is building pre-production Hummer electric vehicles at Factory ZERO, hiring to follow
Continued:Michigan’s auto industry struggles to hire and keep workers – with some quitting before lunch
Free Press writer Mark Phelan contributed to this report.