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General Motors (GM) emerged as the top-selling automaker in the United States for 2023, narrowly outpacing rival Japanese automaker Toyota Motor.
The achievement comes amidst the sector’s best performance since the onset of the pandemic, propelled by the alleviation of supply chain challenges and sustained consumer demand.
Despite facing setbacks from a costly auto strike, General Motors reported a notable uptick in U.S. new vehicle sales, reaching approximately 2.6 million units for 2023. This marks a substantial 14.1% increase from the previous year.
In contrast, Toyota experienced a 6.6% growth, with annual sales reaching around 2.25 million vehicles. The overall U.S. new vehicle sales for the year reached approximately 15.5 million units.
Notably, electric vehicles, including hybrids, constituted nearly 17% of these sales, signaling a heightened interest in environmentally conscious transportation options.
Wards Intelligence data released on Wednesday revealed that these figures represent the highest sales since 2019, surpassing the 2022 numbers of nearly 13.9 million units, according to consultant Cox Automotive.
The robust recovery in vehicle sales provides evidence that the U.S. economy is resilient in absorbing the impact of rising interest rates without succumbing to a recession.
However, analysts caution that the industry may face challenges in the coming year due to high vehicle prices and interest rates acting as potential deterrents to consumer demand.
Cox Automotive stated, “High vehicle prices and high-interest rates remain the industry’s Grinch right now,” emphasizing the potential headwinds the automotive sector may encounter.
Throughout December, car dealers resorted to generous incentives and discounts to clear older inventory after holding back on promotions for two years. J.D. Power reported that this marks the third consecutive year in which U.S. consumers spent more than half a trillion dollars on new vehicles.
In the realm of electric vehicles (EVs), both General Motors and Toyota experienced significant growth. Toyota reported a 30.4% increase in sales of electrified vehicles, constituting 29.2% of its overall U.S. sales.
General Motors, on the other hand, sold 75,883 EVs, with the Bolt and Ultium platform EVs contributing substantially. Despite the positive momentum, challenges lie ahead for the EV sector.
While total U.S. EV sales are expected to account for about 10% of overall auto sales in 2024, analysts highlight the potential impact of high-interest rates on EV demand.
General Motors, expressing confidence in sustained demand, foresees total industry sales of 16 million units for 2024. Meanwhile, shares of major automakers, including Ford, Stellantis, and Tesla, saw a decline on Wednesday, with Tesla experiencing a 4% drop after a remarkable 2023 that saw its shares nearly doubling.
GM has also announced a $7,500 incentive on its EVs following the expiration of a U.S. government tax credit this week, further underlining its commitment to promoting electric vehicle adoption.
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