"Worst Since the Great Depression"… US Car Sales Plunge 23%

The parking lot of a car dealership in Richmond, California, USA, appears quiet due to a shortage of vehicle inventory. (Photo by Bloomberg)

[Asia Economy Reporter Yujin Cho] The U.S. automotive industry experienced its worst sales slump on record last year, failing to capitalize on the year-end peak season. Some evaluations suggest that the entire second half of the year fell into a Great Depression-level recession. As the semiconductor supply shortage recovery is delayed, automakers are expected to face another worst year in 2023.

On the 3rd (local time), Bloomberg cited forecasts from six automotive market research firms including Cox Automotive, TrueCar, RBC, LMC Automotive, and Wards Intelligence, reporting that new car sales in December last year totaled 12.5 million units on a seasonally adjusted basis, down 23% compared to the previous year.

This is the lowest level in history compared to the industry average of 16 million units. Michelle Cripps, an analyst at Cox Automotive, said, "December is usually the biggest peak season with year-end promotions and a surge in demand ahead of the holidays, but this year, even this peak season effect was not realized."

Among U.S. automakers, General Motors (GM) suffered the biggest hit. According to TrueCar, GM's vehicle sales last month decreased by 43% year-over-year, marking the largest decline among global automakers. Ford in the U.S. saw a 20% decrease. Japan's Toyota, the world's top-selling automaker, also experienced a sharp 30% drop in sales.

The situation remains unchanged even when expanded to the fourth quarter and the entire second half. Chevrolet Paducah, one of the top 10 Chevrolet dealers by sales volume, reported that new car sales in the U.S. in Q4 fell 20% year-over-year, and the overall second half showed the worst sales slump since the Great Depression. Duane Paducah, CEO of Chevrolet Paducah, forecasted, "This year, vehicle sales will record the lowest level in the past 20 years."

Due to difficulties in securing inventory caused by the COVID-19-induced semiconductor chip shortage, it is expected to be difficult to see a recovery trend this year as well. CEO Paducah added, "Due to the supply shortage, we are struggling to secure vehicle inventory and are selling cars by showing them on computer screens without physical stock," and "As the semiconductor supply shortage prolongs, the automotive industry will experience its worst year."

On the other hand, electric vehicle maker Tesla is running solo with blockbuster-level sales despite the chip shortage. Tesla delivered a total of 936,172 vehicles to customers last year, an 87% increase compared to the previous year. The Q4 delivery volume was a record high of 308,600 units, setting a quarterly record for six consecutive quarters. This also exceeded market expectations of 267,000 units.

Wedbush Securities analyst Daniel Ives predicted, "Tesla's strong sales momentum will continue this year." Venture capital firm Loop Ventures estimated that Tesla's deliveries could reach up to 1.3 million units this year.

This content was produced with the assistance of AI translation services.