General Motors U.S. Sales Slow in December. Market Up

GM incentives remain the highest among major automakers on average, though, a sign that the GM brands with the best product lineups ever remain weak in the mind’s of buyers.

General Motors posted the company’s highest December sales in five years, as well as its best retail month during all 2012, with deliveries up 5% to 245,733 vehicles year-over-year. Nevertheless, it wasn’t enough to keep up with the rate of growth in the overall  auto market of 9%, as big months from high volume Toyota (+9%) and Honda (+26%) skewed the data a bit.

Some of the Japanese gains were explained by the recovery from the tsunami and earthquake disasters and ensuing production disruptions more than a year ago, but not all. “Not all” is the question that should be much on the minds of GM executive this year, which will see an ongoing jobless recovery and a battle royal in the automotive marketplace as sales approach the 15-15.5 million unit level. 

GM’s Incentive spending, according to GM executives, was “competitive” with industry-wide levels. They cited unpublished J.D. Power estimates to back up that claim. This sort of tracks with publicly available Edmunds True Cost of Incentive figures, which has GM at $3,280 per vehicle compared to an industry average of $2,324, as the largest U.S. automaker continues to try to balance share with profitability, and find things to be positive about as industry observers continue to question if the marketplace parade has passed GM by? GM incentive costs remain the highest among major automakers on average, though, a clear sign that the brands with the best product lineups – ever – remain weak in the mind’s of buyers.

GM sales executives said during a conference call with media that all four GM brands increased their sales year-over-year in December. Well, yes, but the big league game at GM remains Chevrolet, the volume leader at 1.85 million units for the year, as the other three brands are slight in their contributions – GMC at 414,000, a gain of 4%; Cadillac at 150,000, a decline of 2%; and Buick at 180,000, a gain of 2%.

Chevrolet in December led GM with a 6% increase in Silverado pickup truck sales at 51,000, thereby outselling GM’s number 2 seller, the compact Chevy Cruze, by more than 2:1. Combined with sales of the GMC Sierra, up 13% in December at 19,000, GM pickup sales were the highest since September 2008 for its aging – last redone five years ago – pickup truck line.

GM claimed that its mix is better though than truck sales indicate. Total GM passenger car sales in December increased 14% compared with a year ago (industry +15.4%).  Sales of trucks, which include pickups, vans and SUVs, were equal to a year ago as the industry grew 3.7% in this segment.

During December, GM became the first U.S. automaker to sell more than 1 million vehicles in a single year that get an EPA-estimated 30 mpg or better on the highway; a “so what claim” in AutoInformed’s view, and little comfort for common stockholders who still await the payment of a dividend, which could be announced later this month along with what should be record earnings, we speculate.

For 2013 GM estimates that full-year light vehicle sales will rise to 15 million to 15.5 million vehicles from 14.5 million in 2012. The pressure will clearly be on GM to keep pace, which will require a flawless launch of the new Silverado and Sierra, pickups, followed immediately by the mid-size Colorado and Canyon pickups, with the new Corvette and Impala in the middle of this crucial mix.