(Reuters) – General Motors Co on Thursday reported a 40% rise in second-quarter U.S. sales on strong consumer demand, and said it expects the trend to continue in the second half of the year and in 2022.
Low interest rates, government stimulus and a preference for private vehicles due to the COVID-19 pandemic have bolstered auto demand in the United States.
Shares of the U.S. automaker were up 0.5% at $59.48 in morning trade.
“We expect continued high demand in the second half of this year and into 2022,” GM Chief Economist Elaine Buckberg said in a statement.
“The U.S. economy is accelerating, consumer spending is robust and jobs are plentiful.”
Consumers are also purchasing more expensive vehicles despite smaller discounts, boosting profitability for both automakers and retailers, according to industry consultants J.D. Power and LMC Automotive.
The company said the quarter was, however, constrained by low inventories resulting from a global semiconductor shortage.
“I’m not worried though as the demand is there and the economy is rebounding. Plus it appears the worst of the chip shortage for autos will be Q2 so things should recover from here,” Morningstar analyst David Whiston said.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Vinay Dwivedi)