Morningstar

GM Loses U.S. Sales Crown for the First Time Since 1931

We think Toyota won out on sales due to the chip shortage and don't expect the company to maintain its lead over GM.

Securities In This Article
General Motors Co
(GM)

Most automakers, except Ford who reports on Jan. 5, reported fourth-quarter or December U.S. auto sales on Jan. 4. According to Wards, December light vehicle sales fell year over year by 25.6% and by 22.9% after adjusting for one less selling day in December 2021. The seasonally adjusted annualized selling rate of 12.44 million was far below December 2020's 16.31 million due to 2021's chip shortage continuing to cause woefully inadequate inventory. Wards put full-year 2021 sales at 14.93 million, up 3.1% from 2020 but still far from 17.1 million in 2019. Barring no mass pandemic shutdowns in 2022, we expect that this year sees at least about 5% growth from 2021, but the chip shortage will likely not be completely resolved until 2023. We expect gradual improvement throughout 2022, especially in the second half. We believe industry demand remains high. GM's GM fourth-quarter 2021 U.S. deliveries fell 42.9% from fourth-quarter 2020--however, the latter is a tough comparable given it was GM's best retail channel (non-fleet) quarter since 2007. GM said its inventory improved by 55% from the third quarter to finish 2021 at 199,662 units and said its semiconductor supply is improving. There was still some growth in the quarter with Escalade up 2.2% year over year (up 65% for the year) and for the full year the SUV had its best year since 2007. Other GM full-size SUVs like the Chevrolet Tahoe and Suburban rose 7.6% and 3.3%, respectively, in the fourth quarter, and GM claims it has led this vehicle segment for 21 straight years. GM's full year sales fell 12.9% to 2.2 million while Toyota's full year total was 2.3 million, so GM will not lead the U.S. market for the first time since 1931, per Reuters, but we don't expect Toyota to keep its lead because we think Toyota won the sales crown due to the chip shortage. GM's volume declines sound bad, but we believe mix and pricing continue to look favorable for earnings. GM reports year-end results after the market closes on Feb. 1.

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About the Author

David Whiston, CFA, CPA, CFE

Strategist
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David Whiston, CFA, CPA, CFE, is a strategist, AM Industrials, for Morningstar*. He covers stocks in the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007. He writes stock reports, ad hoc reports, stock analyst notes, and builds discounted cash flow models for each company covered. He also assesses their economic moat and makes frequent television and print media appearances in local, national, and international news outlets. Key stocks covered include GM, Ford, CarMax, and all six publicly traded franchise auto dealers, such as AutoNation and Penske Automotive Group.

Before joining Morningstar in 2007, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence, gaining experience around assessing an asset’s cash flow.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond’s Robins School of Business. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner.

In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011 .

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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