Toyota is the first non-U.S. company to be the country's top seller
AYESHA RASCOE, HOST:
Toyota has toppled GM. Toyota Motor Corp. outsold General Motors in the United States in 2021, the first time in the auto industry's history that a company based outside the U.S. has been the country's best seller. Michelle Krebs is an executive analyst for AutoTrader and joins us now to talk about that. Welcome.
MICHELLE KREBS: Thank you.
RASCOE: GM has been the country's No. 1 top-selling automaker since 1931. A lot of things have changed since then, but this had remained the same. So what happened last year?
KREBS: It's very simple. There was a shortage of computer chips, and that reshuffled the deck. General Motors got hit hard by it earlier than Toyota did. Toyota had learned a lot of lessons from the tsunami in 2010, and they had stockpiled some computer chips, so they kind of hummed along into the fall without much problem.
RASCOE: This wasn't, like, a sign of like some cultural shift for U.S. auto buyers.
RASCOE: This is a technical issue.
KREBS: This is purely a supply chain issue. And, in fact, the chip shortage affected every automaker around the globe, including Toyota by the end of the year. It's just different companies got hit at different times by different degrees. So even Toyota says this is a not sustainable, that they will continue to lead in the U.S. So we'll see if this year General Motors can go back on top.
RASCOE: And so - I mean, of course, when it comes to Toyota and other car companies from abroad, they have plants here in America. They hire American workers. Like, how much does it even really matter that a company is headquartered internationally? Does the whole buy American model - does that make a difference when it comes to car companies?
KREBS: I think only in Detroit.
RASCOE: (Laughter) Definitely there.
KREBS: I think when we survey consumers, they really don't care if it's American or from an import automaker. Every global automaker has a plant here in the U.S.
RASCOE: And parts come from all over, right? Like, that's the other part of it.
KREBS: And that's been the problem with the chip shortage. They come from Taiwan. They come from Malaysia, where they've had all kinds of issues from, you know, COVID outbreaks and floods and droughts. So it's a universal problem.
RASCOE: So where are we in this chip shortage? Like, has that been resolved?
KREBS: No. We are going to continue to have some chip shortage through 2022 and some people say even through 2023. But it's not going to be as bad as it was. We think that it bottomed out in about late September, early October. We started to see plants continue to produce vehicles. But as consumers go out and shop for cars, they're still going to find empty lots and empty showrooms because there's very high demand for cars. There's still low inventory. And that empty pipeline is going to take some time to refill. And the other thing consumers will find is prices are high.
RASCOE: Before the pandemic, there was a lot of talk about millennials rethinking car ownership. They don't need a car - you know? - and the thought that car sharing would be the future. Then you had the pandemic, and now you have a lot of people working from home. What do you think a post-pandemic automotive marketplace will look like?
KREBS: What we saw in COVID is there were people that went out and bought cars that had never bought cars before. They wanted personal transportation. I don't think personal transportation will ever go away. But the big question is some people are not going to be able to afford new vehicles, so we may have to come up with new models of how we acquire transportation in an affordable way, whether it's a monthly subscription service or something like that. Fewer and fewer people can afford new vehicles. They're now - the average price is $46,000.
KREBS: And that's just out of the reach for a lot of Americans.
RASCOE: That's Michelle Krebs, an executive analyst for AutoTrader. Thanks for being with us.
KREBS: Thank you.
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