Ford and GM See Strong U.S. Consumer Demand for Autos

Two Detroit auto executives said on Thursday that demand for new vehicles from U.S. retail and commercial customers has exceeded expectations.

Their positive comments backed up an upbeat report from the U.S. Department of Commerce showing an unexpected rise in U.S. retail sales in May as consumers bought more cars and a variety of other goods.

“If consumers keep up this momentum, we could significantly outperform the performance we described,” he said of full-year results. general motors Chief Financial Officer Paul Jacobson said at a Deutsche Bank investor conference.

ford Chief Financial Officer John Lawler said in a separate interview at the conference, referring to the continued strength and “pricing power” of the company’s Ford Pro commercial business, that “consumers will live with it. there is,” he said.

The two CFOs’ comments signaled a shift from the beginning of the year, when many economists and some auto industry executives were bracing for a U.S. recession. Tesla CEO Elon Musk It predicted a “deep recession” in January, after which it began cutting market prices. Electric car company vehicle.

Since then, as supply chain bottlenecks have eased, U.S. auto sales have stabilized and auto production has recovered to near pre-pandemic levels.

Jacobson and Lawler said the companies will continue to push cost-cutting programs that have already cut thousands of jobs from Ford and Auto. GM salary.Both companies are under pressure to fund new product launches Electric car In the short term, it makes far less profit than a conventional internal combustion engine truck and SUVs.

Ford shares rose 1.1% to $14.36 in afternoon trading on the New York Stock Exchange, while GM shares rose 1.5% to $37.93 on the New York Stock Exchange.

Lawler said Ford will continue to do well and grow in the “next few years” for internal-combustion vehicles as it ramps up investment and production in electric vehicles.

At the same time, the company is focusing on reducing engineering and manufacturing costs of its second-generation EVs, including successors, by 50%. F-150 Lightning It is scheduled for this mid-decade.

Lawler hinted that Ford could follow Tesla’s lead in using large underbody castings for its next generation of electric vehicles as part of a broader effort to cut costs.

Jacobson said GM won’t slow down in its efforts to reduce annual operating costs by $2 billion. As GM faces rising costs for electric vehicles, Jacobson said cost cutting “must not be a program…and we’re back where we were. We’re committed to continuous improvement on the cost front. It has to be cultivated,” he said.

Both executives said their decision to join Tesla’s EV charging network and adopt the company’s NACS (North American Charging Standard) charging protocol will save costs and benefit EV customers.

Jacobson said GM has an opportunity to partner with Tesla in developing a future EV hub. charger.

Lawler said the adoption of Tesla’s charging standard would not require additional capital investment from Ford.

GM and Ford EV owners will have access to more than 12,000 Tesla Superchargers in North America beginning in early 2024.