General Motors ekes out Q2 victory, held back by weaker fleet demand

General Motors posted its best quarterly sales numbers since late 2020, a noteworthy victory only slightly undermined by the meager year-over-year improvement across its portfolio.

Let’s look at the data.

• GM sold 696,086 units during the second quarter. This reflects a marginal increase of 0.6% compared to the prior-year period.

• Nevertheless, several key GM products performed far better this time around. Sales rose 40% for electric vehicles and 6% for pickups. This marks the best quarter since 2021 for the latter, which remains one of the company’s more profitable product categories.

• GM outpaced its rival Toyota in the U.S. for the second quarter this year, although its competitor drove substantially more sales compared to 2023. However, GM’s year-to-date sales are still down about 0.4%.

GM’s fleet problem: Although GM did score an important victory that nicely sums up the car industry’s post-pandemic recovery progress, it is struggling in one key area: the fleet market. Production shutdowns heavily suppressed fleet demand throughout 2020 and 2021, forcing business customers to rely on aging units. When manufacturing began again in 2022, these buyers flooded back into the market, desperate to regrow their fleets.

This caused automaker fleet sales to grow rapidly throughout 2023 even though gains in other product categories sales were more moderate. Now that this pent-up demand is fading, GM’s growth is mostly coming from retail. Fleet sales dropped 10% during its Q2.

This is partly why GM’s year-to-date sales are down about 0.4%, despite posting its strongest quarter in four years.

Bottom line: Overall, GM is in a good place for the remainder of the year, with growth moving in the right direction for critical products. It seems likely the brand will continue to see marginal improvements throughout the year.

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