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Friday, 11 September 2020 21:53

GM CEO Mary Barra: Demand Coming Back Quicker Than We Thought

Written by Brian Sozzi, Yahoo Finance

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The race by car on the part of households to decamp to suburbia from congested cities amidst the COVID-19 pandemic appears to be a tailwind for at least one U.S. auto giant.

“Actually, you know it varies across the globe,” General Motors Chairman and CEO Mary Barra told Yahoo Finance’s The First Trade on current demand trends. “We're seeing the China market come back as well as the United States and North America in general, a little faster than we thought. I would say we're cautiously optimistic. There's a lot that we need to see start going in the right direction. But right now we're seeing especially retail demand come back more quickly than we expected.”

 

Barra’s comments come on the heels of GM shelling out $2 billion for an 11% stake in electric truck maker Nikola this week. The deal will make GM the lead manufacturer of Nikola’s 906-horsepower Badger pickup truck and supplier of batteries for the upstart’s semi-trucks.

 

To be sure, the latest data on the broader U.S. auto market is a little bit more mixed than the trends GM is seeing at the moment.

 

Toyota reported earlier this month that sales in August plunged 23%, marking its fifth straight monthly decline. Sales at Hyundai tanked 8.4%. Even Subaru---which has been riding high on the back of interest in its Outback and Forrester---saw sales fall 17.4%.

 

The saving grace for automakers, as Yahoo Finance sister publication AutoBlog points out, is that transaction prices for new vehicles are up as they pull back on incentives. That should help offset weaker volumes in the near-term.


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