Consumer demand for new GM vehicles remains high despite a number of opposing influences, according to GM Chief Financial Officer Paul Jacobson.
According to a recent report from Reuters, Jacobson recently told investors at a conference sponsored by Deutsche Bank that GM has yet to see signs of weakening demand, despite rising interest rates, record high gas prices, and inflation. Available new-vehicle inventory for unsold cars and trucks remains low, while new vehicle prices are high. Jacobson also indicated that GM managed to offset a $5 billion increase in supply chain costs by raising prices and reducing expenses, while underlining GM’s goal of increasing vehicle production by 25 to 30 percent in 2022 as compared to 2021.
According to GM’s CFO, General Motors executives are monitoring for signs of a possible slowdown “every day, every week, every month.” Additionally, GM is remaining cautious with regard to adding staff, while also reviewing capital spending plans. However, with regard to long-term goals in the areas of electric vehicles, software, and other technologies, GM is moving forward, priming the ongoing investments in order to drive revenue growth in the future.
As a reminder, GM previously announced that it would invest $35 billion into new electric vehicle technology and autonomous vehicle technology by 2025.
Meanwhile, GM’s crosstown rival, Ford Motor Co, echoed GM’s sentiments, with Ford CFO John Lawler stating in a separate presentation that prices remain strong and demand remains high. Although Lawler did indicate that Ford’s credit arm was seeing an increase in loan delinquencies, the extremely low delinquencies seen prior make the latest increase less of a concern.
Earlier this year, GM CEO Mary Barra stated that The General would not return to pre-pandemic inventory levels. General Motors began operating with limited inventory after the COVID-19 pandemic shuttered production facilities around the world, a condition later exacerbated by the global microchip shortage. Going forward, Barra says that GM will opt to run “leaner” and more efficiently than prior to the pandemic.
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Comments
This guy needs to be fired when this recession is official. No duh when we have a 2 year backlog demand will remain during a rough economy. A quick auto trader search shows the age of markups are over. At least he’s honest that GM is scared crazy of a fall in demand when they have empty lots and can’t discount by the dozens.
GM is really enjoying the profits being made with them keeping there inventories low . But with the squeeze on the middle class gas food ETC a slow is coming
Can they afford a slow? Their operating costs are still about the same as before the supply shortages. Yes they have higher ATP, but overall retail is way down. If it slows their screwed. Maybe we’ll finnaly see Mary gone. Her solution to everything literally was “higher atp.” That was her response every time.
You can’t even order what you want.
They can’t supply
I’ve had an order at dealership going on 3 months.
Now I’m being told, in order to get what I want, wait order 2023. Higher priced. Higher interest rates.
They simply can’t supply what the the customer wants.
The web site states, build, what you want, order, purchase. That’s does not happen. It’s all about EV.
Too much government involvement and kick back.
Of course, demand will be high when there are only three new vehicles in the lot… idiots!
I’d like a Camaro LT1, no options ($35,395).
I’ve got no chance.
GM gets an A+ for marketing/engineering.
GM gets an F- for production and timely manufacturing
Demand remains high & yet the customer (lots of them) cannot find & purchase what they want. I still have our last Pontiac (2002 WS6 TransAm) that we purchased JAN 2002, so GM lost me as far as cars when they shut down the Pontiac Division. Wife has been working to purchase a 2022 Camaro 22 since NOV 2021, & according to dealer, it has been build, just waiting the the secondary nightmare that is the vehicle shipping to local dealers. We both had planned on a new vehicle as our retirement arrived, she chose the 2022 Camaro, & after studying what was available, I went with a 2022 4Runner. Chose the 4Runner based on dependability/longevity/capability and availability (2 months from talking to dealer to delivery that included being shipping from Japan). The manufacturers & their CEOs had better get something figured out.
GM hasn’t been involved with Lotus for almost 30 years, and sold Opel over 5 years ago.
The other brands were killed of because they weren’t profitable. GM didn’t do it for fun. They did it to stay in business.