US new-vehicle sales barely rose in the second quarter as buyers balked at still-high prices

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US new-vehicle sales barely rose in the second quarter as buyers balked at still-high prices

2024-07-03 06:26 Last Updated At：06:30

DETROIT (AP) — U.S. new-vehicle sales rose only slightly in the second quarter, despite larger discounts and slightly lower prices.

But brisker sales could be on the horizon: Auto industry analysts say they expect prices to drop further and there's a possibility of interest-rate cuts that would make taking out a loan for a new vehicle more affordable.

Overall, U.S. sales were up only 0.1% compared to a year ago, as still-high prices kept many potential buyers out of the market, according to preliminary tallies Tuesday by Motorintelligence.com.

Sales were crimped in late June, when cyberattacks knocked out software from CDK Global that dealerships use to do sales paperwork. CDK said most dealers were back up by Tuesday afternoon, but companies such as General Motors said the problem pushed some deliveries into the third quarter.

Analysts say inventories on dealer lots are building, especially for pickup trucks and other higher-priced vehicles.

Discounts vary by demand for vehicles, with smaller, less-expensive models and gas-electric hybrids generally being in shorter supply. Many customers are delaying purchases, figuring that bigger discounts are coming.

“Waiting may be the optimal strategy here,” said Cox Automotive Senior Economist Charlie Chesbrough.

Toyota, which sells many popular gas-electric hybrids, posted a 9.2% sales increase from April through June. Honda sales were up 2.7%, while General Motors posted just a 0.3% gain and Hyundai reported a 1.8% increase. Subaru had a 5.4% sales gain.

Sales at Stellantis fell 20.7% in the second quarter, with the Ram brand off 26% and Jeep sales falling 19%. Nissan sales fell 3.1%, while Kia was down 1.6%.

Together, automakers reported selling roughly 4.13 million new vehicles from April through June. That’s on pace to reach forecasts of nearly 16 million for the year, a little above last year’s 15.6 million.

Ivan Drury, director of insights at Edmunds.com, said interest rates for new vehicles are averaging just above 7%, a high number for people who bought or leased vehicles years ago but now find they need to replace their rides.

Many, he said, are going for what few lower-priced vehicles remain in the mid- to upper- $20,000 range.

“The stuff that’s very affordable, that’s where it’s at,” said Drury. “You really have to have an attractive product at an attractive price for it to move today.”

For instance, sales of the Chevrolet Trax compact SUV, which starts at $20,400 excluding shipping, were up 152.7% during the quarter.

Kevin Roberts, director of analytics for the CarGurus auto site, said automakers want to keep making higher-profit SUVs and trucks when a big chunk of buyers are after less-expensive vehicles such as compact sedans.

“You’re seeing people search more and more for affordable vehicles. You’re seeing people searching for under $30K,” Roberts said.

The U.S. industry, he said, is at an inflection point where automakers will have to add discounts to get the prices down, or they’ll have to change what they produce to “try to get more attractive price points and try to keep those inventory levels lighter.”

A move toward lower prices, though, could hurt Detroit automakers, which exited the lower-priced small and midsize sedan markets years ago after having trouble making money on the vehicles.

Ever since the coronavirus pandemic began early in 2020, autos have been in short supply as a shortage of vital computer chips hobbled production. Coupled with strong demand, the lack of cars drove average prices to a peak of near $50,000 by December of 2022.

But this year, chip supplies improved, production is up and supplies are on the rise. In June, dealers had about 3 million vehicles in stock, 55% more than a year ago, according to Cox.

As a result, average selling prices dropped 1% to about $48,400 last month. That’s 3% below than the peak of near $50,000 in December of 2022 but still 20% higher than before the pandemic.

Of the vehicles that sit on dealer lots the longest, all are big pickups or SUVs made by Detroit automakers. Stellantis’ Ram 1500 tops the list, remaining at dealers for 141 days, CarGurus said.

Deals can be had on vehicles that sit on lots longer, Roberts said. For example, 6% of national dealer new vehicle sales listings are from the 2023 model year.

U.S. electric vehicle sales overall rose 7% during the first half of the year to 599,134, Motorintelligence reported. EVs accounted for 7.6% of the U.S. new vehicle market, about the same as it was for all of last year. Lease deals, which include federal tax credits, helped to boost sales.

Sales of gas-electric hybrids skyrocketed 35.3% from January through June to 715,768, eclipsing electric vehicle sales. Plug in hybrids, which can go a short distance on battery power before a gas-electric powertrain kicks in, also saw a big increase. Sales were up 24% to 159,399. Both are alternatives for people who fear running out of juice with an EV.

Earlier Tuesday, Tesla reported that its second-quarter global sales fell 4.8%, with a 6.6% decline in the first half of the year. The company doesn’t break out U.S. sales. Ford releases its sales numbers on Wednesday.

Britain's Labour on track for landslide victory, exit poll suggests, amid anger with Conservatives

2024-07-05 10:31 Last Updated At：10:40

LONDON (AP) — Britain’s Labour Party headed for a landslide victory Friday in a parliamentary election, an exit poll suggested, as voters punished the governing Conservatives after 14 years of economic and political upheaval.

The poll released moments after voting closed indicated that center-left Labour’s leader Keir Starmer will be the country’s next prime minister. He will face a jaded electorate impatient for change against a gloomy backdrop of economic malaise, mounting distrust in institutions and a fraying social fabric.

As the official count showed he won his seat in parliament, Starmer said voters “have spoken and they are ready for change.”

Thousands of electoral staff are tallying millions of ballot papers at counting centers across the country, while the Conservatives absorbed the shock of a historic defeat that would leave the depleted party in disarray and likely spark a contest to replace Prime Minister Rishi Sunak as leader.

“Nothing has gone well in the last 14 years,” said London voter James Erskine, who was optimistic for change in the hours before polls closed. “I just see this as the potential for a seismic shift, and that’s what I’m hoping for.”

While the suggested result appears to buck recent rightward electoral shifts in Europe, including in France and Italy, many of those same populist undercurrents flow in Britain. Reform UK leader Nigel Farage, who won his own race for parliament, has roiled the race with his party’s anti-immigrant “take our country back” sentiment and undercut support for the Conservatives, who already faced dismal prospects.

Labour is on course to win about 410 seats in the 650-seat House of Commons and the Conservatives 131, according to the exit poll. That would be the fewest seats for the Tories in their nearly two-century history and would leave the party in disarray.

In a sign of the volatile public mood and anger at the system, some smaller parties appeared to have done well, including the centrist Liberal Democrats and Reform UK. A key unknown was whether Farage's hard-right party could convert its success in grabbing attention into more than a handful of seats in Parliament.

Former Conservative leader William Hague said the poll indicated “a catastrophic result in historic terms for the Conservative Party.”

Still, Labour politicians, inured to years of disappointment, were cautious.

“The exit poll is encouraging, but obviously we don’t have any of the results yet,” deputy leader Angela Rayner told Sky News.

The poll is conducted by pollster Ipsos and asks people at scores of polling stations to fill out a replica ballot showing how they have voted. It usually provides a reliable though not exact projection of the outcome.

Britons vote on paper ballots, marking their choice in pencil, that are then counted by hand. Final results are expected by Friday morning.

Britain has experienced a run of turbulent years — some of it of the Conservatives’ own making and some of it not — that has left many voters pessimistic about their country’s future. The U.K.’s exit from the European Union followed by the COVID-19 pandemic and Russia’s invasion of Ukraine battered the economy, while lockdown-breaching parties held by then-Prime Minister Boris Johnson and his staff caused widespread anger.

Johnson’s successor, Liz Truss, rocked the economy further with a package of drastic tax cuts and lasted just 49 days in office. Rising poverty and cuts to state services have led to gripes about “Broken Britain.”

Hundreds of communities were locked in tight contests in which traditional party loyalties come second to more immediate concerns about the economy, crumbling infrastructure and the National Health Service.

In Henley-on-Thames, about 40 miles (65 kilometers) west of London, voters like Patricia Mulcahy, who is retired, sensed the nation was looking for something different. The community, which normally votes Conservative, may change its stripes this time.

“The younger generation are far more interested in change,’’ Mulcahy said. “So, I think whatever happens in Henley, in the country, there will be a big shift. But whoever gets in, they’ve got a heck of a job ahead of them. It’s not going to be easy.”

Anand Menon, professor of European Politics and Foreign Affairs at King’s College London, said British voters were about to see a marked change in political atmosphere from the tumultuous “politics as pantomime” of the last few years.

“I think we’re going to have to get used again to relatively stable government, with ministers staying in power for quite a long time, and with government being able to think beyond the very short term to medium-term objectives,” he said.

In the first hour polls were open, Sunak made the short journey from his home to vote at Kirby Sigston Village Hall in northern England. He arrived with his wife, Akshata Murty, and walked hand-in-hand into the village hall, which is surrounded by rolling fields.

Hours later, Starmer walked with his wife, Victoria, into a polling place in north London to cast his vote.

Labour has not set pulses racing with its pledges to get the sluggish economy growing, invest in infrastructure and make Britain a “clean energy superpower.”

But nothing really went wrong in its campaign, either. The party has won the support of large chunks of the business community and endorsements from traditionally conservative newspapers, including the Rupert Murdoch-owned Sun tabloid, which praised Starmer for “dragging his party back to the center ground of British politics.”

The Conservatives, meanwhile, have been plagued by gaffes. The campaign got off to an inauspicious start when rain drenched Sunak as he made the announcement outside 10 Downing St. Then, Sunak went home early from commemorations in France marking the 80th anniversary of the D-Day invasion.

Several Conservatives close to Sunak are being investigated over suspicions they used inside information to place bets on the date of the election before it was announced.

Sunak has struggled to shake off the taint of political chaos and mismanagement that’s gathered around the Conservatives.

But for many voters, the lack of trust applies not just to the governing party, but to politicians in general.

“I don’t know who’s for me as a working person,” said Michelle Bird, a port worker in Southampton on England’s south coast who was undecided about whether to vote Labour or Conservative in the days before the elections. “I don’t know whether it’s the devil you know or the devil you don’t.”

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