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GM Sales Propelled 11 Percent Higher by Pickups, Small Cars

July 1, 2011
3 min to read


General Motors today reported that its June sales grew 11 percent thanks in part to a recovery in demand for its full-sized pickups.


Sales of the Chevrolet Silverado and GMC Sierra pickups, which fell in May and were flat in April, snapped back with a 15 percent gain in June. Car sales stayed hot, rising 28 percent, reported Automotive News.

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Don Johnson, GM's vice president of U.S. sales, said the rebound in pickup sales tracked a gradual drop in gasoline prices throughout the month.


"As people got over the fear of a fuel-price spike, those who actually need a pickup have come back into the market," Johnson said during a conference call on Thursday.


As long as gasoline prices don't spike "dramatically," he expects pickup sales to strengthen in the second half of the year, which traditionally is better than the first half for pickup demand.


Still, Johnson confirmed that GM plans to trim its pickup production by idling plants this month, after inventory swelled amid gasoline-price spikes in the spring. He said pickup inventory is "slightly above where we'd like to be," at 122 days' supply. GM's target range is 100 to 110 days, he said.


Despite the decline in gasoline prices, customers still favored fuel efficiency. Chevrolet sold 24,896 Cruze compacts in June, the third straight month the model topped 20,000 units. The Cruze Eco, the most fuel-efficient version with a 42 mpg highway rating, accounted for 17 percent of the model's sales, up from 15 percent in previous months.

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Truck brand GMC led GM's four divisions with a 15 percent sales gain from a year earlier, followed by Buick, up 13 percent and Chevy, up 11 percent. Cadillac sales were down 8 percent, which GM blamed on a planned reduction in sales to rental fleets.


Some of GM's sales momentum comes from luring buyers from non-GM brands. Its conquest rate, the portion of buyers not trading in a GM vehicle, was 47 percent in June, up from 40 percent in January.


Johnson attributed the improvement to hits such as the Cruze, which had 55 percent of its buyers come from non-GM brands in June, in addition to buyers of Japanese cars who might have had trouble finding what they wanted due to inventory shortages related to the March 11 earthquake in Japan.


"It's a combination of lower inventory from some of our competitors as well as quite frankly because of the new product that we have in the marketplace," he said.


GM's crossover sales fell 2 percent because of a reduction in sales to fleet buyers. Retail crossover sales rose 24 percent, led by the Chevy Equinox, up 79 percent from June 2010, and the GMC Terrain, up 75 percent.

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Overall in June, GM's fleet shipments dropped 1 percent, while retail sales rose 16 percent.


After loading on discounts and lease deals to start the year, GM continued a trend of modest incentive spending. In June, its incentives fell about 6 percent from May. Johnson said they stood right around the industry average, which he said was 8.3 percent of the average transaction price in June.


When asked how GM would respond if Japanese rivals Honda Motor Co. and Toyota Motor Corp. ramp up incentives in the second half of the year, Johnson said GM will stick to its goal to be in line with the industry.


"We're going to wait and see what industry does," he said. "But at the end of day, we're going to maintain our competitive position."

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