How Toyota Overtook General Motors in 2021

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The pandemic has changed the way we engage, shop, work, and even study. Unsurprisingly, these dramatic changes have impacted not only us and our communities, but also businesses and societies. The pandemic has forced auto dealerships to go online, while automakers have had to learn to overcome blockages and supply chain challenges.


Elsewhere, car buyers have shifted their focus from engineering prowess to in-car safety systems. Understandably, some automakers have adapted more quickly to this dynamic environment, while others have lagged due to their inability to accelerate change. And in this context, new power actors have emerged, and old leaders have lost their position of authority.

General Motors controlled the American market and held the US sales record for 90 years. However, in 2021, Toyota Motor North America overtook GM for the first time since 1931. With 2,332,262 units sold versus 2,218,228 units, the Japanese manufacturer overtook the American market leader. GM’s sales in the fourth quarter of 2021 fell 43% to 440,745 units sold compared to the fourth quarter of 2020. General Motors sold only 2.2 million new vehicles in the United States throughout the year 2021. This represents a decrease of 13% compared to 2020. Conversely, Toyota’s sales in the fourth quarter of 2021 fell by 28 to 474,378 new vehicles compared to the fourth quarter of 2020. During the entire 2021, the Japanese automaker sold 2.3 million vehicles, up 10.4% from 2020. Toyota’s most in-demand vehicles were the RAV4, Camry, Highlander and Pickup Tacoma.

Related: The Numbers Don’t Lie: How Toyota Became the World’s No. 1 Auto Company


Here’s how Toyota took the top spot in the United States

The chip shortage seriously affected General Motors’ production. According CNBC, General Motors planned to stop or reduce production of approximately 200,000 vehicles in North America in the second half of 2021. The reduction followed the announcement that GM was to extend downtime for nearly all the company’s North American plants for varying terms. Consulting firm AlixPartners predicted that the chip shortage cost the global auto industry $210 billion in revenue in 2021. Additionally, the consultancy firm estimated that 7.7 million production units were actually lost in 2021. While GM wasn’t the only group to suffer from chip shortages, Toyota was better equipped to control supply chain challenges. Interestingly enough, when Toyota overtook General Motors in 2021, the Japanese automaker didn’t brag about the win and maintained the same humility that made the company so popular in the West. In fact, in Japan, the corporate culture emphasizes “Kenkyo” or humility. As such, Senior Vice President Jack Hollis said Toyota was “grateful” for its loyal base, but “being No. 1 is never a goal or a priority”.

Although the chip shortage helped Toyota take pole position in the United States, GM shouldn’t underestimate the company’s cultural strengths and innovation edge. Additionally, the Japanese automaker is a leader in customer service and reliability. According consumer reports, Lexus, Mazda and Toyota were even in 2021 the most reliable brands in the annual ranking of automotive reliability brands. In conclusion, it would be an insult to claim that Toyota’s victory was solely due to a shortage of chips.

Related: The Toyota Cavalier Was The Result Of A Bad U.S.-Japanese Brand Partnership

That’s why Toyota can replicate the victory even in the future

As soon as analysts announced Toyota’s historic win, critics rushed to say it was an unusual event.

“While Toyota should be congratulated on this achievement in the face of the Detroit Three’s historic dominance in auto sales, the company shouldn’t feel too comfortable in the front row,” said Jessica Caldwell, chief executive of Toyota. ‘Insights for Edmunds. “It’s unlikely to happen again, as 2021 has been an extraordinarily unusual year.”

Although General Motors is well on its way to reclaiming the US sales crown, the companies have set a precedent and there is no turning back. During the first three quarters of the year, General Motors overtook Toyota by about 80,000 units. Meanwhile, during the third quarter, General Motors sold 555,580 vehicles, which represents a growth of 24% compared to the third quarter of 2021.

But GM shouldn’t rest on its laurels because big changes are already on the horizon. Historically, GM has played the patriotic card by portraying its trucks as all-American, but that strategy may no longer be effective in the long run. As middle-class families are hit by inflation and their livelihoods threatened by rising fuel prices and skyrocketing car prices, potential consumers will look to vehicles with the best MSRP and best fuel mileage. Plus, they’ll look for cars and trucks that have the best warranty because mechanic visits are getting too expensive. Additionally, they will look for car manufacturers that offer the best and the best after-sales service. These are the areas in which Toyota thrives, and its success story has only just begun.

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