By Nathan Gomes
(Reuters) -General Motors edged out rival Toyota Motor (NYSE:TM) to remain the top-selling automaker in the U.S. in 2023 as easing supply snags and sustained demand drove the industry to its best year since the pandemic.
The Detroit automaker shrugged off a hit from a costly auto strike to report U.S. new vehicle sales of about 2.6 million units for 2023, up 14.1% from 2022, while Toyota's annual sales rose 6.6% to about 2.25 million vehicles.
Overall, U.S. new vehicle sales last year finished at around 15.5 million units, of which electrified vehicles including hybrids made up nearly 17%, according to data released by Wards Intelligence on Wednesday. That was the highest since 2019 and surpassed sales of nearly 13.9 million in 2022, according to figures from consultant Cox Automotive.
The steady recovery in vehicle sales reinforced other signs that the U.S. economy is absorbing the shock from the rapid rise in interest rates without sliding into a recession, though some analysts have warned that higher borrowing costs could take a toll on demand this year.
"High vehicle prices and high interest rates remain the industry's Grinch right now," Cox said.
Car dealers had to offer generous incentives and discounts in December to clear older inventory after two years of holding back on promotions.
"This is the third consecutive year in which U.S. consumers spent more than half a trillion dollars buying new vehicles," J.D. Power said in a report last month.
Electric vehicles also grabbed a bigger share of consumer spending in 2023.
Toyota said on Wednesday sales of electrified vehicles, which include hybrid vehicles and all electric models, rose 30.4% to 657,327 vehicles, making up 29.2% of its overall U.S. sales.
Sales of Toyota's pure EVs, namely the BZ4X and its Lexus RZ, totaled 14,715 units in 2023 and accounted for about 2.23% of overall sales of electrified vehicles.
GM sold 75,883 EVs - of which 62,045 were Bolts and 13,838 were Ultium platform EVs.
The Detroit automaker expects robust demand to carry over into 2024 and forecast total industry sales of 16 million units for the year.
Shares of Ford (NYSE:F), U.S.-listed shares of Stellantis (NYSE:STLA) and Tesla (NASDAQ:TSLA) and GM settled lower on Wednesday. Tesla lost the most, dropping 4% after nearly doubling in 2023.
GM also said it would offer $7,500 incentives on its EVs that lost a U.S. government tax credit this week.
Hyundai (OTC:HYMTF)'s, which reported a 11% rise in its annual sales, posted annual EV sales of 55,783 units. Mazda and Honda (NYSE:HMC) also reported higher annual sales.
Total U.S. EV sales are expected to be about 8% of overall auto sales in 2023, with that number rising to around 10% this year, Cox added. But analysts say high interest rates are set to hurt EV demand as well.
"Sales of EVs are likely to continue to improve, just not at the astronomical rate the industry saw in years past," AutoForecast Solutions said in a report.