General Motors projects a 25–30% increase in the number of vehicles it ships to dealers this year, according to The Wall Street Journal (subscription).
Why numbers were down: In the second half of 2021, a semiconductor shortage stalled GM’s deliveries. The company’s growth projection represents a return to pre-pandemic norms.
An outlier: GM’s production projections surpass the industry norm. Forecaster IHS Markit predicts only an 8.5% growth in vehicle production rates this year as supply chain issues persist.
Why it matters: If GM’s projections are accurate, buying a car in 2022 may be significantly easier and potentially cheaper for consumers than it was in 2021.
Impact of normalization: GM recorded record profits in 2021 because limited output led to increased competition and the prioritization of bigger, higher-margin vehicles. In 2022, the company will return to producing more smaller vehicles, which may lead to less profitable sales. Still, GM expects high prices because demand for new vehicles remains high.
Little profit growth in 2022: “The company doesn’t expect much if any profit growth this year: Its forecast range for earnings per share implied at best a 2.5% increase over last year’s number. The benefits of production growth and consumer confidence will be offset by commodity-price inflation, lower financing profits and investments in electric vehicles and car software.”