If you have pulled up to a gas station in the last few weeks, you have undoubtedly felt the brutal sting to your wallet. With global oil markets reacting to the ongoing war in Iran, the national average for a gallon of regular gasoline has skyrocketed to $3.72 – a massive 27% increase since late February.
Historically, a massive spike at the pump is terrible news for automakers that rely heavily on selling massive, gas-guzzling pickup trucks and SUVs. However, General Motors is shrugging off the surging fuel costs, claiming that the pain at the pump simply isn’t affecting American purchase decisions.
GM Has Four-to-Six Months
Speaking at the Bank of America Global Automotive Summit on Wednesday and reported by Reuters, GM Chief Financial Officer Paul Jacobson addressed the looming fears of an industry slowdown. According to the automaker’s top finance executive, it takes a lot more than a few weeks of expensive gas to scare Americans out of their full-size trucks.
“Usually it takes four to six months of sustained high oil prices before people start to think, ‘Maybe I should go for less mileage, or maybe I should buy down,'” Jacobson explained to the attendees. “I don’t think we see that.”
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What Is Actually Hurting GM Sales?
If gas prices aren’t to blame for slightly sluggish first-quarter retail numbers, what is? According to Jacobson, GM’s sales metrics have been primarily impacted by two completely unrelated factors: severe weather conditions and a lack of dealership inventory.
The inventory shortage is particularly pronounced in the highly profitable truck segment. Because General Motors is currently preparing to launch heavily updated versions of its full-size models (like the Chevrolet Silverado and GMC Sierra), the automaker has intentionally throttled back existing inventory ahead of the new rollout.
While the latest data from the U.S. Energy Information Administration confirms the painful 27% fuel price jump, GM remains confident. Unless the geopolitical conflict drags on and forces oil prices to remain at record highs well into the summer, the Detroit giant expects American truck buyers to keep buying big.
