General Motors says higher costs are hitting across the board

Well, good morning, Jon. Thanks for having us. You know, this quarter was a really strong one for us. But I think that resiliency word works really well. It's something that we've demonstrated for the last several years, whether it was the chip crisis or tariffs or inflation. I think the teams responded really well and this quarter was no exception. When you look at some of the challenges that we faced around inventory levels, the go-to-market team did an outstanding job dealing with the traffic that we saw in the stores, which continue to be strong and steady and has continued through April. So we feel good about the quarter. And, you know, we're able to take up our guidance as a result of the tariff accrual that we took in the quarter. And so far it looks like we're able to handle some of the pressure that we've seen in inflationary items, primarily resulting from energy prices.

Well, I think right now, obviously the team has done a really strong job of maintaining it through even some of the DRAM memory chip issues that we saw in the middle part of last year. I think a lot of that has calmed down, but what we're really seeing across the board right now is inflationary effects in raw materials, aluminum, steel. Just overall transportation and logistics costs. We're calling out about $500 million of pressure that we've added to our forecast for the year. So despite our beat, we're not taking up our guidance by nearly as much as that beat, primarily because we're continuing to adjust the business. But we feel good that we're a little bit ahead of it right now, but we are cautious about how long this might last.

Yeah. So we came into the year saying that price was only going to be up by about a half a percent, which really was the annualization of model year '26 price increases. We haven't built any significant price increases into our models. In fact, what we're seeing is the industry discounting a little bit more. There's some competitive pressure out there, but our team has held up well. I think when you look at the GM portfolio, we've really got a vehicle for every consumer out there. We're known for our trucks and SUVs, but we sold over 700,000 vehicles last year with a starting price of approximately $30,000 or less. So we've got that portfolio. The Chevy Trax is hitting record levels for us last quarter. So we feel like we're in a good spot depending on where the consumer might be.

You know, we really haven't seen any changes. In fact, our light-duty pickup sales were up about 8% year over year in the quarter. And like I said, traffic has been strong. If anything, we probably were a little bit light on inventory coming into the quarter because we had such a strong December and with the weather in January and so on, we had difficulty making up those inventory levels. So we're down quite a bit from where we were a year ago. It gives us an opportunity to replenish that stock and make sure that we've got product in the stores at our dealers for customers when they come. But so far, traffic has remained steady.