Some of the nation’s biggest automakers reported big sales growth in the second quarter on Wednesday, the strongest sign yet that the auto industry is recovering from parts shortages and overcoming the impact of higher interest rates.
America’s biggest automaker General Motors said it sold 691,978 vehicles in April to June, up 19 percent from the same period a year earlier. This was the company’s highest quarterly total in more than two years.
Automakers have been battling a shortage of computer chips for the past two years, which has forced factory shutdowns and left dealers with few vehicles to sell. Recently, rising interest rates have made auto loans more expensive, causing some consumers to postpone purchases or opt for used vehicles.
“I’m not saying we’re on the cusp of exciting growth here,” said Jonathan Smoak, chief economist at Cox Automotive, a research firm. “But now we are at a point where the auto market is returning to greater balance. This is the beginning of a return to normalcy.”
Mr. Smoak said the easing of chip shortages has allowed automakers to re-stock dealer lots, making it easier for car buyers to find the models and features they want. At the end of June, dealers had about 1.8 million vehicles in stock, up about 800,000 from the same point in 2022, according to Cox data.
Strong job creation and rising wages also helped sales, he said.
However, at the same time, high interest rates and high car prices have put the purchase of a new car out of reach for many consumers. In the first half of the year, the average price paid for a new vehicle was a nearly record $48,564. According to Cox, the average interest rate paid on car loans in the first six months of 2023 is 7.09 percent, up from 4.86 percent in the same period last year. Average monthly payments increased from $691 to $784 in the first half.
“Demand will be limited by the level of prices and rates, which are unlikely to come down enough to stimulate demand in excess of market capacity,” Mr Smoak said.
Cox estimates that total new vehicle sales rose 11.6 percent to 7.65 million cars and trucks in the first half of the year. The company now expects full-year sales to top 15 million vehicles, an increase of 8 percent.
Several automakers reported solid quarterly sales on Wednesday. Toyota said US sales rose 7 percent to 568,962 cars and light trucks in the second quarter. Stellantis, which owns brands such as Jeep, RAM, Chrysler and others, reported a 6 percent increase in volumes at 434,648 vehicles.
Honda, which has been severely hampered by chip shortages, said its sales jumped 45 percent to 347,025 cars and trucks. South Korean automakers Hyundai and Kia sold more than 210,000 vehicles and posted profits of 14 percent and 15 percent.
Electric vehicles remain the fastest growing segment of the auto industry. Rivian, a maker of electric pickup trucks and sport-utility vehicles, said Monday it delivered 12,640 vehicles in the second quarter, up 59 percent from the same period in 2022. And on Sunday, Tesla reported an 83 percent increase globally. Sales in the second quarter.
Cox estimates that more than 500,000 electric vehicles were sold in the United States in the first six months of the year, and more than one million will be sold in 2023, setting a record for battery-powered cars and trucks in the country.
Tesla, which does not break out its sales details by country, remains the biggest seller of EVs in the US market. Cox estimates that the company sold more than 161,000 electric cars in the United States in the second quarter. Ford Motor, which offers three fully electric models, reports its quarterly sales numbers on Thursday.
GM sold more than 15,300 battery-powered cars and trucks, but most of that total — about 14,000 — came from the Chevrolet Bolt, a small vehicle the company will stop making at the end of the year. The company also sold 1,348 Cadillac Lyric electric sport-utility vehicles and 47 GMC Hummer pickup trucks. Chevrolet will soon begin deliveries of a new electric Silverado pickup truck that uses the same battery technology as the Lyric and Hummer.