Starting with April 2018, General Motors ceased reporting sales results on a monthly basis for its two biggest markets – the United States and China. But that hasn’t stopped a few people “familiar with the matter” from telling Bloomberg News that GM sales fell 13 percent in August.
According to the sources, the decline came as a result of sales incentives, especially for full-size pickup trucks.
Below Expectations
The alleged 13 percent drop in GM sales is notably lower than the 7.7 percent drop estimated by analysts.
But GM wasn’t the only automaker to underperform, as all major automakers except for Ford Motor Company fell short of predictions in August as a result of eroding demand for passenger cars, including the segment stalwarts such as the Toyota Camry and Honda Accord.
If GM also reduced fleet sales during the month, doing so would also cause sales volume to deteriorate even further as a result of a weaker demand at the retail level. A pull-back in incentives would compound that issue.
GM Declines To Comment
Bloomberg reached out to GM spokesman Jim Cain, who declined to comment on the alleged sales figures. He did, however, confirm that GM reduced discounts during the month.
Demonstrating Discipline
One of the recurring themes in which the post-bankruptcy “New GM” manages its sales operations involves exhibiting cold-blooded discipline in regards to incentive spending, and August was no exception to that strategy.
GM reportedly lowered incentive spending in August by over $800 per vehicle on a year-over-year basis. The incentives were down about $200 from July to $4,146 per vehicle. By comparison, Ford spent $5,097 per vehicle and FCA spent $4,760.
According to Cain, GM was confident enough in its inventory levels to reduce incentive spending. As a result, Average Transaction Prices (ATPs) increased by $915 over a year earlier.
“We felt comfortable with our overall performance, especially with the new vehicles, and thought we had an opportunity to demonstrate discipline,” Cain said. “Some of our major competitors didn’t follow.”
More Info & Reporting
- Running GM sales results
- Running Chevrolet sales results
- Running Cadillac sales results
- Running Buick sales results
- Running GMCÂ sales results
Comments
The real question is with no incentives what was the realized profits vs. if they had given them.
I’m assuming they have that calculated pretty well as part of the new business tracking and modeling software that went into effect over the past year.
Oh I do too but many here see decline and freak.
You know as I this is a balancing act but others need to be reminded.
Agreed. The ATP increase figure YOY, if true and accurate, would equate to a wash on a profit level.
However, a volume decrease naturally brings with a decrease in secondary business earnings such as sales of first-party accessories and subscription-based services (OnStar).
Can GM ever really transform itself into Honda: Cars that hold value like Civic and Accord while avoiding rental fleets?
Maybe I should be saying Chevrolet as opposed to GM given that Cadillac, GMC, and even Buick aren’t really the problem. Can a brand like Chevy that screamed incentives, sub-prime credit and weak residuals ever transform? At the least shouldn’t lines with high depreciation like Malibu be renamed so not to scare off shoppers who competitive shop?
Long-term Cruise AV (if not spun off) and technology like On Star could increase product residual values. Short-term reducing incentives to the point of a 13 percent drop in good times with new product seems to do more harm than good. Even as a regional #4 ranked global automaker General Motors has many challenges.