Ford and GM Report Strong Demand, Exceeding Expectations

New vehicle demand from U.S. retail and commercial customers is exceeding expectations, according to two top Detroit auto executives. The upbeat report by the U.S. Commerce Department showed an unexpected rise in retail sales in May, driven by increased purchases of motor vehicles and other goods. General Motors Chief Financial Officer Paul Jacobson stated that if consumer strength continues, their full-year performance could significantly surpass expectations. 

Ford Chief Financial Officer John Lawler acknowledged the consumer's resilience and noted the strength and pricing power in Ford's commercial business. These comments signal a shift from earlier concerns of a U.S. recession. Vehicle sales have stabilized, and production has recovered to pre-pandemic levels due to eased supply chain bottlenecks. 

Both companies are focused on cost reduction programs to fund the launch of new electric vehicles, which currently yield lower profits compared to traditional combustion-engine trucks and SUVs. Ford and GM shares responded positively to the news, with Ford's shares rising 1.1% and GM's shares increasing by 1.5%