General Motors September U.S. Vehicle Sales Up Slightly

Truck sales at GM were down 20% because of a large -46%  reduction in fleet sales year-over-year.

General Motors reported September U.S. vehicle sales of 210,245 vehicles, an increase of 1.5% compared year to September 2011 in an auto industry that grew by 14.5% overall. GM sales executives, looking for a bright spot, said that passenger car sales increased to 89,000 from 69,000 for September, or +29%, compared to an industry gain of +23.5%. All GM brands increased their retail sales in what was another tough month for the U.S.’s largest automaker.

GM now unquestionably has a better sales mix than the years leading up to its bankruptcy with calendar year-to-date sales of 813,000 cars, 678,000 trucks and 478,000 crossover vehicles. However, GM sales over the course of 2012 are up 3.4% in an industry that recovered at four times that rate. These tepid or slow turn-around GM sales numbers – choose your interpretation – are the sum of a complex three-dimensional marketing game, which attempts to balance profits, capacity, competitive actions and momentum, with still badly needed brand rebuilding at the automaker.

The GM September car sales increase was helped by Chevrolet Impala (15,000), Malibu (11,000), the new Spark (2,200) and the new large Cadillac XTS (2,500). There were also  good sales of the carry-over Buick Verano (4,000), which has killed the Regal in showrooms (1,800 or -39% y-o-y), Chevrolet Cruze (25,787 +43%) and Chevrolet Sonic (7,525). Curiously, GM set a second consecutive sales record at 2,900 units for the Chevrolet Volt, whose Hamtramck plant is temporarily idled to adjust inventory.

September also marked the first deliveries of the all-new compact Cadillac ATS, but at 611 units it is too early to say anything other than the 3-Series BMW competitor is now arriving on dealer’s lots for Cadillac’s third attempt to succeed in this all-import global segment. The ATS is easy to drive well and technically competitive as AutoInformed test drives show, but leasing prices might not be, given BMW’s traditionally high residual values. (Exec summary: more data needed – see Camry lease rates below.)

“Auto sales will continue to be a bright spot for the U.S. economy, which is particularly good news for GM as we walk into an even stronger cadence of new products in 2013 and 2014,” said Kurt McNeil, vice president of U.S. sales operations.

Truck sales at GM were down 20% because of a -46% year-over-year reduction in fleet sales. GM said it was all due to the timing of customer deliveries. GM started the 2013 truck model year 45 days earlier than usual and – combined with summer vacation downtime – this forced fleet customers who wanted 2012 trucks to order early. September was, by this theory, payback for pulling ahead some sales earlier in the year. In any event, things will become clearer, maybe, next month. GM is also in the process of validating substantially revised Chevrolet Silverado and GMC Sierra pickup trucks, which will appear next year as 2014 models. This could also negatively affect sales, if buyers wait.

In the large pickup segment, GM’s total sales were down 12% (Chevy Silverado 36,425 or -17% , and GMC Sierra 14,000 -2%) and fleet sales were down 56%. However, GM reduced its large pickup inventories by approximately 8,600 units compared with August, and earned average transaction prices more than $2,300 per unit above a year ago with the lowest incentive spending in the industry, according to independent J.D. Power PIN data.

GM needs to improve its financial performance, particularly in light of the ongoing losses in Europe and a weak stock price that precludes taxpayers from selling their remaining 33% stake; that is unless the Treasury Department is prepared to take large loss, clearly something it won’t do before the presidential election in November.

GM claims that 70% of all GM nameplates will be all-new or redesigned in 2012 and 2013, but it is facing unprecedented competition in the market, particularly from resurgent Japanese automakers with stronger residual values, and therefore lower lease prices, as well as good buyer loyalty in the hot selling and fastest growing car segments. The best selling car in the U.S. – Toyota Camry – is available for lease rates of less than $200 a month, compared to Chevrolet Malibu lease rates that can easily top $300 a month.

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