Supply chain issues caused by the Coronavirus (COVID-19) and other challenges have thrown car sales for a loop in the last year. That’s led to some surprising news about the rising popularity of Korean car manufacturers Hyundai and Kia in the U.S., as well as an interesting reversal of fortune for GM that long topped America’s sales lists.
The pandemic has thrown car sales into chaos
2022 Kia Telluride | Getty Images
As you have likely heard by now, auto manufacturers have been dealing with some severe challenges in recent years regarding supply chain issues. Many of these challenges have been related directly or indirectly to the pandemic. One of the biggest challenges for car manufacturers has been the shortage of semiconductor chips necessary for production.
This shortage has led not only to emptier dealer lots but also rising prices on both new and used vehicles. As manufacturers across the globe have struggled to produce their vehicles, those who managed to procure the most chips found themselves coming out ahead.
As Vanessa Ton, senior manager of analytics at Cox Automotive, told CNN, “Remember, with this chip shortage, the brand that has the more ample supply is the brand that’s going to win.”
Korean automakers outsold Honda for the first time in the U.S.
It turns out that in the battle for semiconductor chips and the war for overall sales, Korean manufacturers Kia and Hyundai seem to have come out on top of their usual rival Honda in the last year. It was recently reported that in 2021, Japanese titan Honda came in behind the combined sales of Kia and Hyundai for the first time.
More specifically, Honda sold 1,309,222 vehicles in the U.S. last year, while the Korean manufacturers combined for a total of 1,439,497 vehicles. This put them in fifth place in the U.S. market overall. In terms of percentages, Hyundai and Kia had sales increase around 20% in 2021, while Honda’s sales increased by only 8.2%.
If you’re wondering why the sales of two manufacturers have been combined in comparison with those of the lone Honda, it’s because the Korean companies are more intertwined than many Americans realize. Hyundai’s parent company, Hyundai Motor Group, owns a controlling interest in Kia, and the two share engineering across many of their respective offerings.
GM has been dethroned by Toyota
The news about the battle between the Korean manufacturers and Honda wasn’t the only surprise regarding vehicle sales to come out of 2021. Also of note was that the U.S.’s former leading car manufacturer, GM, was ousted from its top spot by none other than Toyota.
Reuters recently reported that this was the first time since 1931 that GM had not held the top spot for sales in the United States. Last year, Toyota sold 2.332 million vehicles in that market, while GM sold 2.218 million. That was the lowest sales figure for GM in over a decade.
Experts generally agree that Toyota’s success last year likely had much to do with its ability to navigate the chip shortage more successfully than GM. It may also have been related to the reduced number of American manufacturers putting sedans on the market these days. Either way, Toyota seems to recognize that it’s unlikely to continue holding this number one position in the U.S. once the supply chain issues are sorted out. It has said simply that it’s “grateful” for its loyal customers and “being No. 1 is never a focus or priority.”
As we eventually move out of the pandemic, it will be interesting to see whether other underdog car manufacturers find their way to the top of sales lists or things will fall back into some sort of “normal.” Whatever that mean.
Keyword: Kia and Hyundai Outsold Honda for the First Time in the US