Strong Q2 For Toyota, GM Points to Auto Industry Strength

Sales Jumps Helping Offset Shaky Market for Automakers
California car dealership
Cars for sale at a Glendale, Calif. automobile dealership. (Mario Tama/Bloomberg News)

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General Motors Co. and Toyota Motor Corp. both posted strong sales gains in the second quarter, signs of consumer health in the auto market as semiconductor supply improves.

GM sales rose almost 19% in the quarter and were up 15% at retail, the company said in a statement July 5. The gains were due in part to strong sales of its Chevrolet Suburban, which along with the Chevy Trax and Trailblazer entry-level models posted twofold increases. Toyota and Stellantis NV also saw increases in the quarter.

The second quarter appears to have been a good one for automakers with Tesla Inc. reporting big gains on a global basis and Stellantis seeing U.S. sales rise. The results show that even with higher interest rates, consumers still have an appetite for vehicles now that output is expanding after supply chain snags.

“The summer months are generally strong, and there is so much pent-up demand,” said Jessica Caldwell, executive director of industry insights at researcher Edmunds. “You have people who need a new car and can’t wait any longer.”

GM, which sold 692,000 vehicles in the quarter, said automakers sold vehicles at a seasonally adjusted rate of about 16 million vehicles in the quarter.

The Detroit automaker doubled sales of its Bolt electric vehicle to almost 14,000, but sales of its newest EVs that run on the Ultium battery are only slowly increasing. The Cadillac Lyriq EV sold less than 1,400. GM’s BrightDrop electric van unit sold 300 of its ZEVO 600 in the quarter.


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Toyota Rebounding

Toyota said on July 5 that U.S. sales rose 7.1% in the second quarter — and more than double that rate in June — as car buyers in the U.S. drove more Camry sedans and RAV4 compact SUVs out of showrooms in line with stepped-up production.

The Japanese automaker said U.S. sales last month came to 195,448 vehicles, up 15% from a year ago, led by the best-selling RAV4. For the quarter ended June 30, its sales climbed to 568,962 vehicles.

Toyota saw a 29% jump in June deliveries of EVs, mostly in the form of gasoline-electric hybrids.

Stellantis managed a 6% sales gain in the second quarter, the company reported July 3. The Ram pickup and Jeep Grand Cherokee were its biggest sellers, while the Dodge Durango and Chrysler Pacifica posted the biggest sales gains.

No Pricing Relief

Toyota is seeing sales and production recover, but despite higher interest rates, hasn’t had to offer discounts, said David Christ, head of the Toyota brand for the automaker’s North American operations.

“Overall the industry is building more and shipping more to dealers. And obviously incentives are rising, which indicates some brands” have excess inventory, Christ said. “The incentives tend to rise in the industry when there’s cars on the lot to sell — and we don’t have a lot of that.”

GM said its average transaction price rose $1,482 per vehicle to a near-record $51,800.

There is some discounting in the market but nowhere near pre-pandemic levels, when rebates and 0% financing deals gave consumers thousands in sales incentives, Caldwell said.

Hyundai Motor Co. said earlier in July that its U.S. sales were up 14% in the second quarter to 210,164, led by the Tucson crossover and entry-level Elantra sedan. Hybrids and battery-electric cars like the Ioniq 5 made up 20% of its retail sales in the month of June.

The chip shortage is still limiting inventory, and there’s still “pent-up demand” from buyers who waited for prices to fall or inventory to improve during the pandemic and semiconductor shortage, said Randy Parker, CEO of Hyundai’s U.S. business. That should keep sales strong in the coming months, he said.

“Obviously the Feds are considering raising interest rates a couple more times,” Parker said. “But given strong demand for our products, we expect the second half to be equally as strong.”

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