New York: Tesla reported a surge in second-quarter deliveries on Tuesday, while other US automakers suffered drops in sales for the first half of 2019, with higher vehicle costs weighing on consumers.
Shares of Tesla shot higher in after-hours trading after it reported delivering 95,200 vehicles during the quarter ending June 30, a record and an increase of more than 50 per cent over the prior quarter.
The company, which has faced worries about weakening demand for its electric vehicles, said in a securities filing, “we believe we are well positioned to continue growing total production and deliveries in Q3.”
Earlier, General Motors, Fiat Chrysler and Toyota were among the companies that reported drops in sales through the year’s midpoint, although Fiat Chrysler won a modest gain in sales in June.
Sales at Honda and Nissan also fell through the first half of the year. Ford reports sales on Wednesday.
The results were roughly in line with analyst forecasts and reflective of an auto market that has cooled somewhat, even as demand has stayed strong for larger autos.
Higher interest rates on auto loans have added to the drag on consumers, who already face higher vehicle costs, said Michelle Krebs, head of automotive relations at Cox Automotive.
Cox is forecasting 2019 sales of 16.8 million, down three per cent from last year, with a drop to 16.5 million expected in 2020.
Annual sales have been above 17 million the last four years.
“We have seen retail sales weakening for some time,” Krebs said in an interview, adding that the effect has been mitigated somewhat by higher sales from companies who are taking advantage of tax incentives to refresh their fleets.
“The consumer has got a lot of debt and wages have stagnated,” she said.
General Motors reported a 4.2 per cent drop in first-half sales of 1.4 million following a 1.5 per cent dip in second quarter.
The company’s fleet of larger crossover vehicles sold well, along with fully available versions of the Chevrolet Silverado and GMC Sierra, two popular pickups that were recently revamped.
However, overall sales of both the Sierra and Silverado fell compared with the year-ago period because some versions of the vehicles are still not widely available. A GM spokeswoman said more vehicles would be on the market in the second half of 2019.
“The US economy continues to grow at a healthy pace,” said GM Chief Economist Elaine Buckberg. “If the Fed cuts rates, as widely expected, lower financing costs will provide further support to auto sales.”
Fiat Chrysler bucks trend
Fiat Chrysler’s auto sales for the first half of the year were down two per cent at 1.1 million.
A two per cent gain in June was propelled by a 45 per cent surge in Ram truck sales, which offset declines in the company’s other brands, including Jeep, Chrysler, Dodge and Fiat.
The results suggest Ram has gained market share from GM’s Silverado during the latter’s launch period, Krebs said in a note from Cox.
Toyota North America reported a 3.1 per cent drop in first-half sales to 1.2 million, with a 3.5 per cent decline in June sales.
The company pointed to higher June sales of its RAV4 crossover vehicle. But sales of the Corolla and Camry sedans have fallen for the first six month so of the year.
Sales of the company’s luxury Lexus brand fell during the quarter but rose slightly during the first half of the year.