General Motors U.S. April Sales Down 8% in a Growing Market

General Motors Co. (NYSE: GM) today reported April sales of 213,387 vehicles in the United States, a decline of 8% in a month that looks to be running at more than 14 million units on a seasonally adjusted basis, an increase of at least 2%.  

General Motors normally doesn’t adjust for selling days, but with 3 fewer selling days and one less weekend, Don Johnson, vice president, U.S. Sales Operations, engaged in a little perspective or special pleading depending on your point of view.  On an adjusted selling day basis, GM’s sales were up 12.2%. However, in early reports from J.D. Power, total deliveries were up 15% from the same month a year ago on a selling-day-adjusted basis. GM’s market share is now running at only 17.5%, but retail sales were about equal to April 2011 in a market that is slowly growing.

Chevrolet April sales at 155,500 were off 8.4%, but the Silverado pickup truck and the Tahoe SUV were up 4.8% at 31,000 and 7.1% at 5,800, respectively. The GMC Sierra pickup was also strong at 12,600 units, a 20% gain.

The much maligned Chevrolet Volt – a mere footnote in the sales tables -also had its second best sales month in history at 1,462 units, but consider the Toyota Prius line of hybrids is now selling at close to 30,000 units a month.

More worrisome – because of volume – was the 28% drop in sales of the compact Cruze to 18,205 units. Chevrolet sales executive Alan Beatty explained the drop because of  transaction prices, with the Toyota Corolla at roughly $16,000 and the Cruze at $19,000, he said. GM is struggling with profitability, especially in Europe where industry sales are headed for their fifth straight year of declines, so North America has to pick up the slack – a risky proposition given GM’s weak brands.

GM has stopped officially disclosing incentives, but independent estimates on a total basis, not car line, from J.D. Power and Edmunds.com have GM at the highest levels in the industry – over $3,200 to Toyota’s $1,200 or so.

Buick once again posted a decline, this time -25% at 15,450 vehicles, with the mid-size Regal off -37% at 2,850. The compact and less expensive Verona sold 3,000 sedans. This begs the question whether Buick in particularly, perhaps General Motors overall, has been too aggressive in raising prices to boost profitability.  The brands aren’t strong enough and the competition remains formidable. Once again Chrysler posted a 20% sales increase to 141,000 vehicles in April, and my bet is GM and Ford are where the growth is coming from to a large degree.

Cadillac in the process of launching two new cars, its new XTS large sedan just entering production and in late summer, its new ATS compact sports sedan.  Late in 2012, Buick will launch the new Encore small crossover, which made its debut at the North American International Auto Show.

“We expect gradual improvement in the economy going forward,” said Johnson. Based on higher than expected first quarter industry sales and expectations that the U.S. economy will continue to grow, GM is increasing its full-year light vehicle sales forecast to 14.0 million – 14.5 million units from 13.5 million – 14.0 million units.