As vehicle microchip supplies improve to give auto dealers more inventory to sell, buying a new car should become easier in 2022, but questions remain of at what cost.
On Tuesday, February 2, General Motors (GM) announced a projected increase in the number of vehicle inventory from 25% to 30% this year to ship to auto dealers globally. Despite the semiconductor shortage holding back much of GM’s vehicle deliveries in the second half of 2021, the expected jump would make up for lost time and money.
Even with GM’s prediction, Toyota, for example, has already cut its production target for the month of February due to persistent bottlenecks, in which the forecaster IHS only expects an 8.5% growth in vehicle production globally this year with supply chain shortages continuing into 2023.
While GM did have record profits in 2021 due to limited output forcing consumers to compete for vehicles in stock at dealers, the company expects to have less profitable sales this year and looks to focus on restoring the production on smaller SUVs and sedans.
As a whole, GM expects normalization to reappear in the supply of cars, but the company doesn’t expect much profit growth this year. Looking ahead to 2023 and beyond, GM has a vision for improving revenue, but much of that will depend on unproven business models and technologies around EV software, which are already starting to emerge.