During the first quarter of 2023, GM U.S. sales figures rose more than 17 percent to 603,208 units. Likely a large contributor to this rise in sales number, recent comments from GM’s chief financial officer reflect that customer demand has also been unexpectedly high.
According to a report from Reuters, new vehicle demand from retail and commercial U.S. consumers is outpacing industry-wide expectations. This positive trend comes as a recent U.S. Commerce Department report demonstrates that U.S. retail sales rose in May 2023.
“If the consumer remains at this strength, we could significantly outperform what we said [about full-year performance]”, GM CFO Paul Jacobson was quoted as saying.
These recent comments come as a stark contrast to sentiment from earlier this year. In the beginning of the 2023 calendar year, many economist and executives expected and braced for a U.S. recession. In fact, Tesla cut prices on its electric vehicles in response to economic forecasts.
Since then, vehicle prices in the U.S. have stabilized, and the production of new vehicles has recovered close to pre-pandemic levels as supply bottlenecks continue to ease.
In spite of a less strenuous economic future, General Motors is still committed to reducing costs as it continues to develop all-electric vehicles, which have lower profit margins as compared to traditional ICE-powered vehicles. To this end, the Detroit-based automaker has already cut thousands of jobs from its payroll.
Furthermore, Jacobson noted that General Motors has no plans to stray from its effort to cut $2 billion out of its annual operating costs. With rising electric vehicle costs, Jacobson stated that cost reduction should not be “a program … and we go back to the way it was. We have to cultivate continuing improvement on the cost side.”