GM’s Q2 Auto Sales Jumps 40% in U.S.

Automaker giant General Motors (GM) said its U.S. vehicle sales climbed 40% to 688,236 vehicles in the second quarter on the back of strong customer demand. However, sales were hampered by low inventory levels impacted by global semiconductor shortages.

As per a CNBC report, auto research firms Edmunds and Cox Automotive had expected GM’s sales to grow in the range of 40% to 43%.

At quarter-end, GM had 211,974 units in inventory, down 36.6% compared to the first quarter. (See General Motors stock chart on TipRanks)

Chief Economist at GM Elaine Buckberg said, “Consumer demand for vehicles is also strong, but constrained by very tight inventories. We expect continued high demand in the second half of this year and into 2022.”

In the second quarter, GM owned 40.6% of the retail market for full-size pickups, up 4.5% year-over-year, delivering more than 237,000 Chevrolet Silverados and GMC Sierras, up 36% compared to the year-ago period.

Chevrolet sales increased 31%, with the Bolt EV and Traverse both delivering record second-quarter and first-half deliveries.

GMC sales grew 50%, recording the best second quarter and first half since 2005, with combined sales of the all-new Yukon and Yukon XL growing 126%.

Buick sales climbed 86%, recording its best quarter in more than 15 years. The increase was driven by strong demand for the new Encore GX, redesigned Envision, and Enclave.

Cadillac sales grew 55%, its best since 2015.

GM fleet sales, which were impacted by pandemic shutdowns last year, are showing signs of recovery and grew 69% year-over-year.

UBS analyst Patrick Hummel recently maintained a Buy rating on the stock and expects GM to report earnings of $2.06 per share in the second quarter.

Hummel set a price target of $79 to the stock, implying 33.6% upside potential from current levels.

Based on 13 Buys and 1 Hold, GM has a Strong Buy consensus rating. The average General Motors price target of $72.93 implies 23.4% upside potential from current levels. Shares have gained 134.2% over the past year.

General Motors scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.