Auto Execs Say Consumer Demand Remains Strong
GM and Ford top execs say U.S. consumer demand for cars and trucks remains strong, despite soaring interest rates and gas prices.

GM Chief Financial Officer Paul Jacobson
GM
General Motors Co. and Ford Motor Co. top execs say U.S. consumer demand for cars and trucks remains strong, despite soaring interest rates and record high gas prices.
The Federal Reserve boosted U.S. rates on Wednesday to combat a surge in consumer prices. Rate hikes, costly gas and inflation have spelled disaster for Detroit's automakers in the past.
"We have not seen signs of weakening demand," GM Chief Financial Officer Paul Jacobson told investors at a Deutsche Bank conference. New vehicle prices are high while inventories of unsold cars and trucks remain at historic lows, he said.
GM has offset $5 billion in higher supply chain costs by raising prices and cutting expenses, Jacobson said. He reaffirmed GM's earlier financial targets and its goa to increase vehicle production for 2022 by 25-30% over 2021.
Ford Chief Financial Officer John Lawler reported demand remains strong as prices stay steady.
But Ford’s credit arm, he says, has started to see loan delinquencies increase, a potential indicator of softer demand. He added that the higher delinquencies are not a concern yet because of extremely low delinquencies before.
Both Lawler and Jacobson reported low inventory will benefit their companies if U.S. economy head into a recession.
Jacobson said GM executives are watching for signs of a slowdown while Lawler said Ford has done modeling on the potential impact of both moderate and severe recessions.
Low inventories are a benefit if a recession occurs. In the past, the Detroit automakers and their dealers carried two to three months' worth of vehicles on their lots. When the recession decreased demand, they were forced to offer deep discounts to sell old vehicle models.
"We are not going to go back to the high inventories that we had in the past. We've targeted 45 to 55 days and we're going to stick to that," Lawler said.
GM's also is taking a cautious approach to adding staff, and is reviewing capital spending plans, Jacobson said. He maintained the company would not cut long-term investments in electric vehicles, software and other new technology that may drive revenue growth.
Originally posted on Auto Dealer Today
More Showroom

Affordable, Safe Cars for Teen Drivers
Families looking to balance affordability and safety in vehicles for their teen drivers can look to the updated list of recommended vehicles by IIHS and Consumer Reports.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
Holman Opens Porsche Dealership in Miami
The North Miami store features the brand’s signature Destination Porsche design concept, combining contemporary architecture and technology to create what the auto group calls an ultra-luxury experience.
Read More →
Chicago to Gain Cadillac Rooftop in 2027
The two-story Cadillac dealership is being constructed at the former Lincoln Yards site, owned and operated by Canada-based Jack Carter Auto Group.
Read More →
Mid-Atlantic Ford Store Has New Owner
A growing Maryland automotive group is only the 93-year-old dealership’s third owner after its longtime proprietors retired.
Read More →
Porsche Dealership Breaks Ground in Illinois
Barrington Porsche will be the new location for Murgado Automotive Group’s existing Porsche dealership currently in the Motor Werks of Barrington auto mall.
Read More →
Michigan Auto Group Acquires Ohio Rooftops
Feldman Automotive Group added two new brands, Honda and Toyota, to its portfolio with its latest acquisition of four Fireside dealerships in Ohio.
Read More →
California VW Dealers Go After Scout
The franchisees’ state-level actions follow a California auto dealers trade group lawsuit against the VW affiliate last year, both efforts to stop the EV maker’s plan to sell direct to consumers.
Read More →
EVs Gain Traction in Europe
First-quarter auto sales increased as more consumers took advantage of government incentives. Hybrid deliveries are leading the way on the electrifieds boom.
Read More →
California Holds EV Lead Despite Annual Decline
At nearly 14%, California had the lowest zero-emission vehicle market share in the first quarter since the fourth quarter of 2021, according to the California New Car Dealers Association.
Read More →