G.M.’s Profits Fell 18.5 Percent in the First Quarter
Rising interest rates and near-record prices have made it hard for many U.S. consumers to afford new cars and trucks. In March, car buyers paid an average of $48,008 for new vehicles, up nearly $1,800 from March 2022, according to Kelley Blue Book, a market researcher. The average monthly payment on new cars last month was $784, compared with $683 a year ago.
While G.M.’s U.S. sales rose in the first quarter, signs of softening consumer demand in the broader market have started to appear. Last week, AutoNation, the largest auto retailer in the United States, said its new-vehicles sales fell 2 percent in the first quarter.
“There is a lot of mixed economic signals in the market, and within auto retail, which do warrant, I think, a more cautionary approach than the past few years,” AutoNation’s chief executive, Mike Manley, said in a conference call.
One big area of growth for the auto industry is in electric cars. G.M. said Tuesday that it would build a battery plant with a South Korean partner, Samsung SDI. The two companies will jointly invest $3 billion in the factory, but did not disclose a location. G.M. is working with another Korean company, LG Energy Solutions, at a battery plant in Ohio that has started production, and on two others are under construction in Tennessee and Michigan.
G.M. is hoping for a surge in sales of electric vehicles later this year. In the first quarter, the company sold more than 20,000 E. V.s in the United States. Mr. Jacobson said G.M. expected E.V. production in the first half of the year to top 50,000, and about double that in the second half.
“We feel good about the demand being robust for the electric vehicles we are producing,” he said.
One reason G.M.’s sales fell so much in China is because consumers increasingly prefer electric cars. That has created a big opening for Chinese manufacturers and hurt Western automakers that have been slow to roll out electric vehicles.