General Motors U.S. Sales Increase 3% in November

General Motors Company reported its highest November sales since 2007, with deliveries up 3% compared to a year ago. The results were so-so because the U.S. light vehicle market expanded by more than 14% to 15.5 million vehicles on a seasonally adjusted annual rate or SAAR. All told, GM sold 186,505 vehicles in November, maintaining its Number One U.S. sales spot ahead of Ford Motor (178,000) and Toyota Motor Sales (162,00). Year-over-year sales to GM’s retail customers were flat, while sales to fleet customers grew by 16%. (See also General Motors U.S. Sales Increase 5% in October)

GM sales year-to-date (2.34 million) are up 3.5% in an industry that is rebounding at almost four times that rate. Among major automakers GM’s sales gains are the weakest by far, particularly when compared to the resurgent Japanese Three, with Toyota (1.9 m) at +29%, Honda (1.3 m) at +24% and Nissan (1 m) or +11%, now that Asian natural-disaster induced production disruptions are over. To be fair, the tepid GM sales are the sum of a complex three-dimensional game, which attempts to balance badly needed revenue and profits, against capacity, competitive actions and momentum, along with ongoing brand rebuilding.

GM sales executives during a conference call emphasized that actual transaction prices increased by $750 a vehicle y-o-y, according to J.D. Power PIN data. Moreover, GM appeared to be the only major automaker to reduce incentives from October. GM’s car and crossover mix increased from 56% of total sales to 62%. Transaction prices also increased about $190 per unit from October, when the car and crossover mix was 60%. This shift away from trucks is, in the end, a much healthier position for GM in spite of shorter term volume issues.

GM’s largest and most important division, Chevrolet, posted flat sales in November at 129,000 cars and light trucks, due in part to aggressive incentives on pickup trucks from Dodge Ram – as high as $5,000 on outgoing 2012 pickups – and Ford F-Series. GM flatly said it would not match these deals in a quest for better returns and higher residual values for owners. GM claimed its incentives were $500 per unit lower than the segment average, which includes incentive stingy Toyota and Nissan. As a result, GM pickup truck transaction prices were up more than $2,700 y-o-y, and more than $700 month-over-month.

The biggest truck spenders – the other two of the Detroit Three – have $1,500 to $1,700 more promotional money on average on their trucks than GM. No surprise then (at least inside GM), the Chevrolet Silverado was off 10% for the month at 31,000 pickups, while the GMC Sierra fared slightly better by only declining 2% to 12,000 units. Ford flat out cleaned up with is F-Series sales of more than 50,000 in November, but at an unknown cost to the bottom line.

The new 2014 Chevrolet Silverado will be on public display for the first time at the 2013 North American International Auto Show in January in downtown Detroit, and will start production next year in a complicated phase-in and phase-out of new and old Silverado and GMC Sierra pickups at multiple production plants. It will then be make or break time for GM to deliver strong pickup sales once again.

Sales of GM passenger cars increased 19% in November compared with November 2011. Crossovers were up 9% and sales of trucks were down 11%. Buick at 13,000 and Cadillac at 15,000 had their best November sales since 2006 and 2007, respectively.

“The East Coast’s ongoing recovery from Hurricane Sandy helped drive the November SAAR materially higher, but it benefited our competitors more than GM, since they rely on the region for more of their sales,” said Kurt McNeil, vice president of U.S. sales operations, who is painfully aware of how strong Japanese automakers are on the East Coast.

“It’s clear that the industry will come in at the high end of our full-year sales forecast,” he added. (14 to 14.5 million ) “Exactly how much growth we can expect next year will depend in part on how Congress and the president resolve the fiscal cliff issue. Consumers hate uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth.”