Despite concerns over an ongoing United Auto Workers (UAW) strike, US automakers have reported a surge in new vehicle sales for the third quarter. General Motors (GM) led the way with a 21% increase in sales, reaching a total of 674,336 vehicles. This impressive performance was driven by strong demand for GM's pickup trucks, affordable crossover SUVs, and electric vehicles (EVs). In fact, EV sales experienced a significant 28% jump during the third quarter compared to the previous quarter, showcasing the growing popularity of electric vehicles.
Although the UAW strike has raised concerns over potential supply disruptions, GM's strong sales were partly aided by inventory that was built up in anticipation of the strike. The impact of the strike on the financials of automakers is yet to be disclosed, but the 40-day UAW walkout in 2019 resulted in a 6% sales decline in the fourth quarter, costing GM $3.6 billion. GM currently has 442,586 vehicles in inventory.
On the other hand, Asian brands have also experienced strong gains in the US market during the third quarter. Toyota reported a 12.2% rise in sales, while Kia and Hyundai also posted higher sales for the same period. However, Hyundai has faced challenges due to rising interest rates, which have made it difficult for consumers to afford vehicles, despite offering incentives for their electric vehicles. It is worth mentioning that Hyundai EVs do not qualify for the US Inflation Reduction Act tax credits.
Meanwhile, Tesla, the electric vehicle leader, missed market estimates for third-quarter deliveries due to planned factory upgrades. This downturn in deliveries is expected to be temporary, and Tesla remains a key player in the EV market.
Overall, despite the UAW strike and other challenges, US automakers have shown resilience in the third quarter, benefiting from the strong demand for their latest models and improved supplies. The impressive performance signals a continuation of the upward trend in the auto industry and the growing popularity of electric vehicles.