General Motors Co’s (GM) sales overtook those of Japanese automaker Toyota Motor Corp (7203.T) in the United States in the third quarter, data on Monday showed, but investors and analysts are worried that a clouding economic picture will cause a decline in car sales.
Thus far, a shortage of cars owing to supply disruptions, combined with a preference for personal transport, has seen consumers willing to spend more money, mainly protecting profits at auto dealers and automakers who have reduced discounts.
But analysts now warn demand may diminish in coming quarters as increasing interest rates deter consumers from shelling out more for cars and trucks in the coming months.
“We’re cautiously optimistic about moving forward. There’s a lot of negative consumer sentiment in the marketplace. So we’re obviously concerned about that,” Randy Parker, chief executive officer of Hyundai Motor North America, said in an interview on Monday.
GM said in the quarter through September it sold 555,580 vehicles, 24% higher than in 2021 when inventory shortages hurt sales. The Detroit automaker, whose shares jumped 2.6% in morning trade, added it would increase production of Chevrolet Bolt electric models in response to soaring demand.
Shipping finished vehicles to consumers proved to be another hurdle for the industry in the quarter. Tesla Inc (TSLA.O) shares slipped on Monday after it sold fewer-than-anticipated vehicles in the third quarter as deliveries trailed way behind production due to logistic snags.
Buy Crypto NowToyota Sales Dropped As GM Sales Increased
Toyota’s sales slid 7.1% to 526,017 vehicles in the same period, the automaker said, adding that it “did not face any shipping issues”. Supply issues, however, beat down sales of Fiat Chrysler (STLA.MI) by 6%.
TrueCar analyst Zack Krelle said:
“We are paying close attention to how the industry will react to these concerns. Perhaps there will be more incentives, longer finance terms, or a combination of these.”
Auto industry consultant Cox Automotive said U.S. automakers may have more sales of vehicles in the third quarter compared to Japanese brands, which are still battling inventory issues. Another consultant Edmunds said a total of 3,393,988 new trucks and cars will be sold in the United States in the quarter, a 0.9% fall compared to a year ago.
GM said it wants to boost calendar-year production of both Chevrolet Bolt EUV and Bolt EV for global markets to more than 70,000 in 2023 from around 44,000 vehicles this year.
