General Motors reports best quarterly sales since the pandemic

General Motors Co (NYSE: GM) has achieved its highest quarterly sales in over three years, driven by significant growth in full-size pickup trucks and electric vehicles.

On Tuesday, the Detroit automaker reported second-quarter sales of 696,086 vehicles, marking a 0.6% increase from the previous year and the highest quarterly sales since Q4 2020.

At the time of writing, GM shares were trading at $46.63. The stock has surged approximately 35% from its year-to-date low in mid-January.

Reasons behind the increase in sales

Electric vehicle deliveries increased by 40% from the previous year to 21,930 units. However, EVs constituted only 3.2% of the total sales in the second quarter.

Buick and GMC saw sales rise, while Chevrolet and Cadillac experienced declines. BrightDrop also delivered 490 units in the quarter.

“We have an incredible portfolio of diverse vehicles and we’re flexible, so we can win as more customers embrace EVs and we can keep winning if they want to stay with the engine technologies they know,” said GM Senior Vice President and President, North America, Marissa West.

This growth is notable given that Edmunds and Cox Automotive had predicted industry wide sales to remain flat due to slowing retail demand.

GM sold approximately 229,000 full-size pickup trucks in the second quarter, marking a 6% increase from the previous year and achieving the highest quarterly sales since 2021.

However, GM’s total sales for the first half of the year declined by 0.4% compared to the previous year, totaling around 1.3 million vehicles.

GM’s second-quarter sales are projected to slightly outperform the overall industry. Industry forecasters anticipate that second-quarter sales across the auto industry will remain approximately level compared to the previous year due to slowing retail demand.

Watch here: https://www.youtube.com/embed/NuB9Nj-w3e0?feature=oembed

Did the June 19 ransomware attack have an impact?

A major factor in the second quarter is the impact of cyberattacks on dealer software provider CDK Global on sales. The June 19 ransomware attack led CDK, the software company that provides data and technology to the automotive industry, to shut down its dealer management system, affecting nearly half of all dealerships in North America.

Jessica Caldwell, the head of insights at Edmunds, believes the CDK cyberattacks have disrupted sales during the second half of June, which is considered as one of the most lucrative and busiest periods of the month and quarter for dealerships.

In a statement, GM also said, “Dealers using the CDK platform are striving to meet strong customer demand despite the challenging conditions. Some deliveries might be delayed until the third quarter.”

The latest sales numbers follow GM’s recent authorization of a $6.0 billion stock repurchase. 

The New York-listed automotive giant is set to report its full second-quarter earnings in the last week of July. 

Wall Street currently rates GM stock as “overweight,” with an average price target of $55, indicating an 18% potential gain. GM stocks have surged over 150% from its pandemic low.

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