General Motors reported a strong performance in the last quarter, with U.S. customers paying an average of nearly $49,900 for new vehicles, contributing to a 15% increase in the company's net income compared to the previous year. Despite industry analysts predicting larger discounts and growing inventories in the U.S. new-vehicle market, GM's Chief Financial Officer stated that the company does not plan significant price cuts.
In the second quarter, GM generated $2.92 billion in net income on revenue of $47.97 billion, surpassing analyst expectations. The company sold 903,000 vehicles in North America, an increase of 70,000 units from the same period last year. However, international unit sales declined to 140,000 vehicles.
Although GM initially anticipated a 2% to 2.5% price drop this year, the actual decline has been less than expected, with a projected 1% to 1.5% decrease in the second half. The average sales price was slightly lower due to a higher proportion of sales coming from lower-priced models like the Chevrolet Trax small SUV, alongside strong demand for pricier pickup trucks and larger SUVs.
Despite a slight decrease in average vehicle prices, GM has maintained market share and avoided significant discount increases compared to industry trends. The company remains focused on delivering products that resonate with customers, allowing pricing to adjust naturally.
GM revised its full-year net income guidance to a range of $10 billion to $11.4 billion, citing sales performance and pricing strategies as key factors. The company aims to sell 200,000 to 250,000 electric vehicles this year, with plans to boost marketing efforts to promote EV awareness.
GM's Cruise autonomous vehicle unit received a $500 million investment in the second quarter, with plans to leverage next-generation Chevrolet Bolt electric vehicles for passenger transportation. Cruise's revenue targets have been adjusted following setbacks, including the postponement of the Origin robotaxi project.
Despite challenges, GM remains optimistic about meeting its targets, with new vehicle models entering the market and increased production capacity in key facilities. The company's commitment to innovation and strategic investments underscores its long-term growth objectives.
