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Recession Might Not Be the Big Risk for Car Stocks

Don’t worry too much about a recession hitting Detroit. The real concern should be normalizing supply.

The U.S. new-car market is stuck in a low but lucrative gear as manufacturers struggle with production. General Motors warned Friday that its second-quarter profit would be lower than previously expected due to parts shortages curtailing deliveries to dealers. Second-quarter sales overall came in at around 3.5 million, according to estimates by Edmunds and Cox Automotive, down about 20% from the same period of 2021.