GM, Toyota report lower quarterly sales in US amid affordability concerns

By Nathan Gomes and Kalea Hall

April 1 (Reuters) – Top automakers General Motors and Toyota reported lower first-quarter sales in the U.S. on Wednesday, as economic uncertainty, high borrowing costs and vehicle prices keep buyers on the sidelines.

Industry expert Cox Automotive had earlier said it expects overall first-quarter sales in the country to drop 6.5% and annual sales to drop 2.6%.

“The loss of EV tax credits, coupled with ongoing elevated interest rates and vehicle prices will lead to a slower pace,” said Charlie Chesbrough, senior economist at Cox Automotive.

GM reported a nearly 10% drop in sales to 626,429 units, hit by winter storms early in the quarter and an unfavorable comparison due to a strong surge of sales in the year-ago period.

But the company still held on to its top spot for quarterly sales, followed by Japan’s Toyota, which reported a marginal drop in sales to 569,420 units, helped by steady demand for crossover SUVs like the RAV4.

Mazda, too, reported about a 14% drop in its quarterly sales.

But Hyundai and Honda reported higher numbers, buoyed by demand for their SUVs, trucks and hybrid models.

FUEL COSTS SURGE

The U.S.-Israeli war on Iran has added to the strain on the market, with rising oil prices posing a risk to consumer spending. Gas prices are approaching a national average of $4 per gallon.

But Scott Bell, vice president, global, at Chevrolet said he was optimistic on the carmaker’s outlook for the year, adding that the higher fuel prices were yet to significantly hit demand.

Although pricier fuel typically boosts interest in electric vehicles, analysts say overall demand could be hit if car prices stay high.

EV sales, which surged ahead of a federal incentive cut last year, are expected to fall about 28% in the first quarter, Cox said.

“Pure EV shopping interest has climbed to its highest point so far in 2026,” said Erin Keating, senior director of economy and industry insights at Cox Automotive.

“We’ve had peaks before, so while this trend is encouraging, we’re not in uncharted territory,” Keating said.

At dealership lots, rising inventory levels are driving more competition among dealers, which could benefit buyers looking for better deals.

“When you have more vehicles than you have customers, it is going to be very competitive,” said Jason Hoff, CEO of Mercedes-Benz North America.

Jim Walen, a Stellantis and Hyundai dealer in Seattle, expects flat sales this year as consumer sentiment weakens, even as automakers push for growth, potentially leading to higher discounts.

(Reporting by Nathan Gomes in Bengaluru and Kalea Hall in Detroit; Editing by Sahal Muhammed)