The Mixed State Of Auto Market In The Us Paints A Confusing Picture To Consumers

As some sedan models saw gains in US car sales during the first quarter, automakers reported mixed results as a possible sign that vehicle affordability may be pushing consumers to purchase more expensive models.

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All of the major automakers have reported higher US sales this year, while Stellantis and Toyota have shown declines in sales.

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As a result of interest rate hikes that have raised the cost of car loans as well as the increased cost of fuel, a murky picture emerges as average auto prices remain around $50,000, a lofty price tag.

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There were 603,208 vehicles delivered by GM in the first quarter of the year, which was up 17.6 percent from just one year ago thanks to improved vehicle availability at dealerships.

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A strong US job market was cited by Cox Automotive as a contributing factor to the company's success, despite higher interest rates and the overall cloudy environment in which the company operated.

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According to GM vice president Steve Carlisle, the company has a "busy season" of product launches coming up to the beginning of 2023 which he described as "a great start".

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During the first quarter, Carlisle believes that his company gained significant market share, prices were strong, inventories have been in good shape for months, and for the first time in the company's history, it sold more than 20,000 electric vehicles in a quarter.

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Some of the popular GM brands were the Chevrolet Silverado and GMC Sierra pickup trucks, which were among the brands with higher sales.

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Despite these price increases, there were even bigger gains in models such as the electric Chevy Bolt and the Chevy Malibu, a sedan that starts at a mere $26,000 and can go up to $42,000.

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There has been a big turnaround in passenger car sales in recent years, said Garrett Nelson, CFRA Research's senior analyst. "Most likely, it's due to increased affordability," he said.

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In the same quarter, Toyota reported a decline of 8.8 percent in quarterly sales to 469,558 units.

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While Toyota said in a press release that dealers would improve their inventories to meet customer demands, a report from Cox Automotive on March 16 indicated that Toyota's daily supply of vehicles out of more than 30 brands was the lowest in the country. The report indicated that lower-priced vehicles were in particular in short supply.

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It should be noted that for the last 18 months or more, lean vehicle inventories have supported higher prices, while factory shutdowns in the wake of Covid-19, followed by shortages of semiconductors, have contributed to these prices.

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The automotive industry is still struggling with supply chain issues, although industry sources say that the situation has improved somewhat from a year ago as compared to what it was last year.

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As per Cox, Stellantis reported a nine percent drop in sales to 368,237 and is responsible for some of the brands with the highest inventories, such as Jeep and Chrysler, which are accounting for some of the biggest declines in sales.

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According to Charlie Chesbrough, a senior economist at Cox, Jeep's sales are sensitive to the double whammy created by the rising cost of borrowing and the increased cost of vehicles.

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Chesbrough told AFP that there is a mixed bag of buyer interest out there and everyone is trying to figure out which is the best one for them.

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There was a 6.8% jump in Honda's sales to 284,507, which made it the company with the highest sales growth, with the increase in car sales exceeding the increase in truck sales.

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There was a 36 percent jump in Tesla deliveries last quarter, according to new figures released on Sunday, as the company does not break out sales by country.