Business
US car sales on cruise control despite pressures
US car sales on cruise control despite pressures
About this update from Stellantis N.v.
By Kalea Hall and Nora EckertAutomakers on Wednesday reported steady second-quarter U.S. vehicle sales, despite what normally would be a bleak backdrop for the car business.Since early spring, American consumers have confronted sharply higher gas prices, an uptick in inflation, unease over jobs, and jitters over the . And yet, U.S. vehicle sales in the first half of the year declined just 3% year over year, according to Omdia Automotive.General Motors NYSE:GM reported a 4% year-over-year decline in the second quarter, but did see increases in sales of the GMC Sierra truck and more affordable offerings including the Buick Envista. Crosstown rival Stellantis MIL:STLAM saw a 6% increase in quarterly sales on the back of strong Ram truck sales despite higher gas prices.Hybrids boosted sales for Toyota Motor TSE:7203 and Hyundai KRX:005380 in the quarter, which were up 1% and 4% respectively.Hyundai North American President Randy Parker said the company is moving at "warp speed" to bring hybrids into its Georgia plant to meet demand.Dealers, analysts and executives cite several factors helping to stabilize the U.S. car market. Affluent buyers, who are less sensitive to inflation and rising fuel prices, account for a growing share of vehicle sales.Meanwhile, borrowing costs in recent months receded slightly, helping shoppers offset those added cost pressures, according to research firm JD Power. More car shoppers also are gravitating to hybrid models to avoid high gasoline prices, helping to buoy overall sales volumes.“The new-vehicle market has been essentially shrugging off the Iran war and this huge run-up that we've had in oil prices and fuel prices,” said Charlie Chesbrough, senior economist at Cox Automotive.K-SHAPED ECONOMY PROPELS CAR SALESThe highly cyclical car market historically has contracted during wars and energy shocks. Car sales fell in the months following the U.S. invasion of Iraq in 2003, for example, and in 2008, when gas prices surged above $4 per gallon for the first time.Today, affluent buyers continue to prop up the U.S. car market, dealers and analysts say, an example of the K-shaped economy, where higher-income consumers continue to spend on big-ticket items while lower-income people struggle.Last year, buyers with household incomes of $100,000 or less accounted for 36% of new vehicle sales, down from 51% as recently as 2020, accordin...