Toyota is expected to not only top General Motors in full-year U.S. sales this year, but it may repeat that feat in 2022 as the ongoing microchip shortage continues to impact global and North American automobile production.
Meanwhile, vehicle prices are expected to continue to increase and interest rates are expected to start rising late next year in a pinch that could push even more consumers away from new vehicles and toward used ones, according to analysts from LMC Automotive and Oxford Economics.
Speaking Wednesday on the global outlook for light vehicles, LMC analysts said automakers have lost 6.8 million units of planned vehicle production so far this year around the world, and they could lose another 2.6 million vehicles from planned production before the end of 2021 as the microchip shortage continues to roil the global industry.
"There is a likelihood of this moving from a supply constraint to a demand constraint," said Jeff Schuster, president of global vehicle forecasts for LMC Automotive. "Some consumers are being pushed out of the new-car market" by rising prices and lack of inventory and are moving instead to used vehicles.
In North America, year-to-date production is actually up 7.4 percent from last year's COVID-19 shutdown-constrained figures, breaking a four-year streak of production declines on the continent. However, through the first three quarters, automakers lost 2.2 million vehicles from planned production, including 1.98 million because of the microchip shortage, and collectively lost over 3,000 production days in assembly plants because of supply shortages, said Bill Rinna, LMC's director of vehicle forecasts for the Americas.
Rinna said GM and Ford Motor Co. have been hardest hit so far in North America, with GM losing an estimated 675,000 vehicles from planned production and Ford down about 600,000. By comparison, Toyota and Stellantis had each lost roughly 300,000 vehicles, Rinna said.
The lost production and strong-though-cooling demand brought inventories down to under 1 million vehicles, or a 24-day supply, at the end of September, compared with what Rinna called a "normal" level of 65 days. However, LMC analysts said inventory levels were expected to begin to recover later in the year as microchip shortages ease and could recover to about 2.5 million vehicles by mid-2022, with more normalized levels returning later in 2023.
In terms of sales, Augusto Amorim, senior manager for Americas vehicle sales forecasts at LMC, said the company sees Toyota Motor North America retaining its current sales lead over GM through the fourth quarter and likely keeping it through 2022 as microchip shortages continue to play out.
"We do expect Toyota to maintain its sales lead over GM for the full year," Amorim predicted. "We expect 2022 to be a tie with GM in market leadership and expect GM to regain market leadership [in North America] in 2023."
He said light-truck sales will continue to grow relative to cars. "There's still a market for cars, especially for compact cars," he said, but overall, car sales will not come back.
Amorim detailed other retail trends that may be concerning for dealers over the longer term. He said lease penetration in the U.S. is moving down, and in September, more new vehicles were financed than leased. He said borrowers are also looking more favorably at noncaptive lenders. Both trends could impact automaker and dealer abilities to recapture return customers by either pulling leases ahead or luring buyers back with attractive captive offers, which in turn could weaken availability of late model off-lease vehicles.