Most automakers on Tuesday, with the exception of Tesla, reported modest sales growth in the three months between April and June, as high interest rates, persistently high auto prices and uncertainty about the economy and the upcoming presidential election weighed on on consumers.
Sales at the end of June were also slowed by disruptions at car dealers stemming from a cyberattack on a company that supplies software and data services to dealerships.
Cox Automotive, a market research firm, estimated that 4.1 million new cars and trucks were sold in the second quarter, up slightly from the same period in 2023. In the first six months of 2024, 7.9 million new vehicles were sold . up 3 percent from the first half of last year, Cox said.
Sluggish growth is likely to continue through the rest of the year, with consumers delaying big-ticket purchases until after the election, said Jonathan Smoke, Cox’s chief economist. “The market has been shaken by the uncertainty,” he said. “We may not be able to maintain the pace of sales of the first half, but we do not expect a collapse in sales.”
Cox has predicted that 15.9 million new cars and trucks will be sold this year. That would be an increase from the 15.5 million that were sold last year, but still well below the 17 million vehicles sold annually before the pandemic.
General Motors said Tuesday it sold about 700,000 cars and light trucks in the United States in the second quarter, an increase of less than 1 percent from the same period last year. The company said it was the highest quarterly total since the fourth quarter of 2020.
The quarterly total includes sales of nearly 22,000 electric vehicles, up 40 percent from a year ago. Almost all were models using GM’s cutting-edge Ultium battery pack technology. Its best-selling electric models were the Cadillac Lyric, a luxury sports utility vehicle, and the Chevrolet Blazer, also an SUV.
GM said its sales in the first six months of 2024 totaled 1.3 million vehicles, down slightly from the same period in 2023.
But Tesla on Tuesday said its global sales fell 4.8 percent, to about 444,000, in the second quarter from the same period a year ago. The company’s sales have now fallen for two consecutive quarters; they fell by 8.5 percent in the first three months of the year from a year ago.
Tesla’s second-quarter sales were higher than analysts’ expectations, and they were supported by price cuts in some markets and the company’s offer of loans with an interest rate of up to 1 percent for the Model Y sports utility vehicle. Tesla may have sacrificed profit to support sales, analysts say.
Tesla once held almost the entire market for electric cars, but recently it has faced stiff competition from Chinese carmakers such as BYD, Nio and SAIC, which sell cars in Europe using the British MG brand. Chinese brands undercut Teslas in their home market while offering features such as dashboard screens that can be rotated by voice command.
In Europe, Tesla was fifth in April in electric car sales, according to Schmidt Automotive Research. Tesla ranks behind Volkswagen; Geely Auto, which owns Volvo and Polestar; Stellantis, which owns Peugeot and Fiat; and BMW.
Tesla’s market share in the United States is expected to fall below 50 percent this year as GM, Honda and other major automakers offer models that are newer designs than the Tesla Model Y and Model 3, which make up 95 percent of Tesla’s sales.
An official total for industry sales won’t be available until Wednesday, when Ford Motor Co. is expected to report its latest sales figures.
The auto industry is still trying to regain a sense of normalcy after the pandemic disrupted vehicle production and left manufacturers struggling with shortages of key parts for most of the past three years.
Dealers now have healthy inventories of new vehicles — about 2.8 million — Cox said. But the rising prices of new vehicles have made it difficult for many consumers to buy them. Cox said the average price of new vehicles sold in May was $48,389, close to the record high of about $50,000 set at the end of 2022.
High interest rates have also reduced demand for new vehicles. The average interest rate paid on new vehicle loans in June was 10 percent, the highest level in 24 years, Cox said.
For a while, electric vehicles had been a growth area for automakers, but sales of these models have slowed significantly in the past 12 months. Cox said just under 300,000 battery-powered cars and trucks were sold in the second quarter, about the same number that were sold in the year-ago period.
Consumer interest in such cars has cooled because they tend to be sold at higher prices than gasoline models and because many potential buyers worry about how far they can travel on a fully charged battery and difficulties in refueling.
At the same time, interest in hybrid vehicles, which have a combustion engine and batteries and electric motors, has increased. This has helped automakers such as Toyota, Honda, Hyundai-Kia and Ford offer hybrid models.