USA

Americans are buying cheaper cars – Orange County Register

Gabrielle Coppola and David Welch | Bloomberg News (TNS)

Toyota Motor Corp. and Honda Motor Co. posted big U.S. sales gains and General Motors Co. increased its retail deliveries to start the year, as demand for cheaper models helped automakers defy expectations. a generalized slowdown.

Toyota announced Tuesday that its deliveries rose more than 20% in the first quarter, driven by the Corolla compact sedan and RAV4 crossover. Honda’s CR-V crossover and Civic compact helped the Japanese automaker record a 17% sales increase. GM reported a 1.5% drop in units sold in the quarter due to lower corporate fleet purchases, but increased its retail sales 6%, with its Chevrolet Trax compact showing the biggest gain. .

The early findings underscored the importance of affordability for car buyers after pandemic-driven shortages and high interest rates drove up costs in recent years. The price bonanza that fueled automakers’ profits during the pandemic is fading as production normalizes. Now that inventories are rising, automakers are handing out more incentives and prices are starting to fall.

Economy cars and compact SUVs made stunning market share gains in the first quarter, with sedans’ growth matching that of Toyota’s SUVs. Full-size pickup trucks – one of the most expensive segments in the industry – lost ground in January and February, according to researcher GlobalData. Several brands, including Jeep, Tesla and Ford, have cut prices to win back inflation-weary consumers and boost demand in the sluggish electric vehicle market.

“I’m surprised at how resilient the market is,” said David Oakley, an analyst at GlobalData. “Affordability is a major issue for the industry, and this will move forward. But for now, it seems like they’re weathering the storm and people are somehow managing to make it work. »

GM said sales of its big, expensive SUVs, including the Chevrolet Tahoe and GMC Yukon, had fallen. Meanwhile, purchases of its new Chevrolet Trax, a compact SUV with a starting retail price of just $20,400, increased sixfold as part of the company’s push toward affordable vehicles.

The company is seeing slow progress in resolving production issues related to its electric vehicle battery operations that make its new Ultium battery. Although volume is still relatively low, GM had its best quarter with the new generation of electric vehicles, selling 5,800 Cadillac Lyriqs and 1,668 Hummer electric trucks.

The industry’s annual sales pace, known as the seasonally adjusted annual rate, rose to about 15.8 million in March, up from 14.9 million a year ago, according to the average estimate of eight analysts surveyed by Bloomberg. The 3.8 million vehicles sold in the first quarter represent a 6% increase from a year ago, but a 3.1% decline from the final quarter of 2023, Edmunds said.

California Daily Newspapers

Back to top button