GM bucks trend in US car sector

General Motors confounded the US motor industry on Thursday by reporting higher car and light truck sales last month in spite of cutting back low-margin sales to car rental companies and generally soft consumer demand.

GM’s 3.4 per cent increase, led by a surge in its newly launched pick-up trucks, contrasted with a further deterioration in the performance of its two Detroit-based rivals.

Ford Motor reported a 13 per cent decline and Chrysler’s sales were down 8 per cent.

According to preliminary data, total US sales of cars and light trucks last month were roughly unchanged from a year earlier at a seasonally adjusted annual rate of 16.6m units.

Toyota continued its unrelenting advance, posting a 12.2 per cent gain, including record sales of the Prius petrol-electric hybrid hatchback.

Toyota recently began offering incentives on the Prius for the first time.

According to CNW, an automotive research firm, Nissan and Toyota pushed incentives more aggressively than any other carmaker last month.

Emily Kolinski Morris, Ford’s economist, said the industry faced “challenging economic conditions” this year, underlining the need for caution in production and inventory levels.

But Paul Ballew, GM’s sales analyst, forecast stronger retail demand in the second half of the year.

Ford announced a 14 per cent cut in second-quarter production compared with last year. GM expects a 5 per cent drop in second- quarter output.

GM shares rallied after the announcement but slipped back to end the day 1.1 per cent lower at $31.54.

The improvement at GM, which exceeded its own expectations, was led by strong increases in sales of the Chevrolet Silverado and GMC Sierra pick-ups.

By contrast, sales of Ford’s F-Series pick-ups, its top-selling model, dropped 12 per cent. Another disappointment for Ford was a one-fifth drop in sales of the Mustang sports car.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.