King of Cars
As we discussed on Monday, the auto industry has had a tough 2021. The labor market has been a small but pointy thorn, and the pandemic is doing pandemic things. COVID-19 led to the nasty supply chain crisis, which has been the biggest boon of them all. Demand was still high, but materials needed to manufacture vehicles such as semiconductors were missing, reducing the number of vehicles manufactured and sold as dealership lots were empty. This time of crisis showed us who can navigate through tough times, and those who aren’t able to keep up. Here, Tesla isn’t the biggest story, but instead the passing of the throne is.
In 2021, Toyota overtook General Motors to become the top-selling car company in the United States for the first time in company history. Toyota’s sales rose by 10 percent from last year to 2.3 million vehicles, outselling GM by more than 100,000 vehicles. GM, on the other hand, saw their sales decrease by 13 percent from last year as the chip shortage proved to be too strong for their business. Other players increased their market share in the United States, with Hyundai, Volkswagen, and Tesla gaining, and one common theme between some of these companies is their link to the globe. There were 15 million car sales in the United States, which was an improvement but still far from the pre-pandemic level of 17 million. One factor is the increase in car prices, with the average vehicle costing a record price of 45,700 dollars, and car companies believe that their problems won’t be solved until the end of this year. What’s your outlook for the auto industry this year?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.