General Motors’ (NYSE: GM) reported a 40% increase in second-quarter U.S. sales amid a rise in demand for its SUVs. Nevertheless, sales missed analyst expectations upon the continuous shortage of semiconductor chips that has affected the automotive industry.
As a consequence of the covid-19 outbreak, low interest rates and government stimulus auto demand has shot through the roof within the United States despite rising prices and low inventory. According to industry consultants J.D. Power and LMC Automotive, people are buying more expensive cars, driving up profitability for both automakers and retailers.
“The U.S. economy is accelerating, consumer spending is robust and jobs are plentiful,” GM Chief Economist Elaine Buckberg said in a statement.
“Consumer demand for vehicles is also strong, but constrained by very tight inventories. We expect continued high demand in the second half of this year and into 2022.”
The automaker’s shares rose 0.6% during morning trading as U.S. auto sales reached 688,236 vehicles during the quarter.
“I’m not worried though as the demand is there and the economy is rebounding. Plus it appears the worst of the chip shortage for autos will be Q2 so things should recover from here,” Morningstar analyst David Whiston said.
Analysts predict that automakers sold around 4.5 million vehicles in the U.S. during the second quarter, an overall 52% to 53% rise in comparison to 2020’s second quarter. Other automakers’ sales are resulting slightly below analyst expectations as well.