New York (AFP) – Automakers reported a mixed batch of second-quarter US sales on Wednesday, revealing continued demand for trucks and large models despite rising gasoline prices due to the US-Iran war. General Motors delivered 714,896 vehicles during the three-month stretch, a drop of 4.2 percent from the year-ago period. A decline had been expected, but the sales were a bit above the level of leading forecasters. Rival automakers Toyota, Hyundai, and Jeep-maker Stellantis all reported modest gains roughly in line with analyst expectations.
Edmunds.com had projected industrywide sales of 4.1 million for the quarter, down about one percent from the year-ago level. Edmunds analysts had cited higher gasoline prices and lofty interest rates as headwinds to sales. Economists with Cox Automotive, which forecast a 0.5 percent decline, characterized the Middle East war as an unforeseen challenge for the industry, with gasoline prices spiking above $4 a gallon for much of the quarter before retreating in June.
“Nobody had the Middle East conflict on their bingo card,” Cox Chief Economist Jeremy Robb said on a conference call late last month. “And it hit right at the worst possible moment, just as consumers were receiving some of the largest tax refunds seen in years,” Robb said. “Those refunds essentially absorbed the shock and shielded what probably would have been a very painful hit to the broader economy.”
GM cited discontinued products as a factor in its year-over-year decline. Figures released by the company also showed a drop in sales of GM electric vehicles, such as the Chevrolet Silverado EV pickup truck. Legislation backed by US President Donald Trump last year eliminated a consumer tax credit for such vehicles. But GM enjoyed increases in sales of several sport utility vehicles, including the Chevrolet Trailblazer, Traverse, and Equinox. A company presentation also highlighted higher sales for the GMC Sierra pickup truck.
“Our business is performing well, and customer demand is resilient, especially for our trucks and SUVs,” said GM North America President Duncan Aldred, who cited GM’s “discipline” in managing inventories and limiting discounts.
Most of these well-performing vehicles are larger products, illustrating the continued appeal of such vehicles in the United States. The average price is currently $3.85 a gallon of regular, according to the American Automobile Association, still about 20 percent above year-ago levels and drawing attention from Trump and other politicians. Prices retreated somewhat throughout June after the two countries signed a memorandum of understanding on terms to end the war. Analysts consider higher gasoline prices a headwind for low- and middle-income consumers, but note that other car buyers in the US have benefited from stock market records and appreciating home prices.
GM said its average retail price in the quarter was $52,400, above the national average. It had 511,000 vehicles in inventory at the end of the quarter, about 5,000 vehicles below the level at the end of the first quarter. At Toyota, overall sales came in at 673,971 vehicles, up 1.1 percent. The figures included a 19.5 percent increase in “electrified” vehicles, which at Toyota includes hybrid options. Stellantis reported sales of 328,284 vehicles, up six percent. The increases were led by the Ram brand, with pickup truck models scoring increases and offsetting lower Jeep brand sales. Sales of Hyundai brands Hyundai and Kia rose 3.4 percent to 468,892.
© 2024 AFP
