FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S. REUTERS/Rebecca Cook
NEW YORK: General Motors Co (GM) made big sales gains in the second quarter in a sign the semiconductor shortage is easing, but the relief may arrive for automakers just as consumers get squeezed by rising interest rates and concerns about the economy.
The Federal Reserve’s recent actions have pushed up rates on car loans while inflation is already hurting consumer confidence, according to Edmunds.com, which projects a 0.9% decrease in third-quarter sales from a year ago and a 2.7% drop from the previous quarter.
Edmunds said auto-loan rates hit a three-year high of 5.7% in the three months ended Sept 30. That could put carmakers in a tough spot even if they can find more chips.
The used-vehicles market is already softening and there are signs that the new-car market could follow. Some automakers are starting to dangle interest-rate incentives and sales to corporate fleets are starting to come back.
“There’s a lot of negative consumer sentiment in the marketplace, we’re obviously concerned about that,” said Randy Parker, chief executive officer of Hyundai Motor America, in a roundtable with reporters.
“We’ve noticed that inventory levels from a lot of brands have started to pick up.” While sticker prices remain elevated, price gains are decelerating – which spells potential trouble for automakers’ ability to maintain high profit margins.
New-car prices rose 6.3% in September to record an average of more than US$45,000 (RM208,890), JD Power projected, a slowdown from the 10% growth rate that has prevailed for the year to date.
Power forecasts seasonally adjusted annual sales for the month rose to 13.6 million units, up 1.5 million units from 2021. Inventory levels are also rising.
Dealers had 39 days of vehicle supply on hand last month, up 51% from a year ago, according to Cox Automotive.
Stellantis NV, owner of the Ram pickup brand, said commercial sales to fleet owners jumped 57% from a year ago.
Ram and Jeep are among a handful of brands that have increased the use of incentives since the start of the year, according to Cox Automotive.
“We have long predicted that if retail demand softened, the automakers had the fleet lever to pull, and it appears they have done so,” Michelle Krebs, executive analyst at Cox Automotive, said in an email.
GM posted a double-digit gain in third-quarter sales on improved supplies of hard-to-find computer chips, allowing it to best Toyota Motor Corp by some 30,000 vehicles. Toyota and Stellantis both reported lower sales for the three months ended Sept 30.
September sales will likely rise 7.7%, a reflection of improved inventories compared to a year ago, according to Cox Automotive.
Many major automakers, including GM, Toyota and Stellantis reported US sales Monday for the most recent quarter.
Ford Motor Co is expected to provide its US sales data later yesterday and Tesla Inc, which provides global numbers, reported its results on Sunday.
GM’s sales soared 24% in the most recent three-month period to 555,560 units, allowing it to stay ahead of Toyota for a second consecutive quarter. It was aided by its ability to secure more semiconductor chips and boost production, the company said in a statement.
Its mainstream Chevrolet brand boosted sales 30% and Cadillac saw a 50% increase in the most recent three-month period. — Bloomberg
