GMI Analysis: Trucks Continue to be GM's Saving Grace
But it ain't all good at the homestead....
Spin, spin, spin! That’s how it goes every month when vehicle sales are tabulated, siphoned through a funnel, and released as PR pieces that hypes all that’s good (or, perhaps, doom and gloom). So what can be made of General Motors' June 2015 numbers?
“We just wrapped up the U.S. auto industry’s best six months in a decade, driven by strong demand for pickups and crossovers,” commented GM’s U.S. vice president of Sales Operations, Kurt McNeil. “People feel good about their jobs and the direction the economy as a whole is taking, so the second half of the year should be strong too, and that’s especially good news for Chevrolet and GMC, brands that have very broad truck and crossover portfolios.”
Like last month, GM’s trucks, SUVs, and crossovers have been carrying the company . . . and making up for poor passenger car sales. Compared to June 2014:
• Chevrolet pickup sale are up 33 percent overall (including fleet sales), with Silverado retail sales up 22 percent.
• GMC pickup deliveries are up 37 percent overall – its 17th month of growth. Sierra retail sales are up 13 percent.
• Chevrolet Colorado deliveries are at 6,558 units overall, plus it’s America’s fastest-selling pickup with a dealer turnover of 15 days. Its GMC Canyon twin followed at 2,532 overall.
• GMC Acadia crossover retail sales are up 24 percent.
• Chevrolet Trax crossover has had its best sales since its launch, with 5,971 sold.
• Cadillac SRX sales were up 24 percent – its best June ever.
Now that we’ve reached the half-year mark for 2015, we know that GM’s 6-month truck/van/SUV share is up 2.1 percent to 38.9, while the company’s crossover share is up 0.4 percent to 12.6, according to J.D. Power PIN estimates.
But for those characters who tend to see things more as half-empty than half-full, it was not a good month for GM. Sales are down 3 percent overall, but that can be partly blamed on a 45 percent dip in rental deliveries, a move which was previously announced.
By brand, General Motors’ retail sales continue to suffer, especially passenger cars:
• Buick retail sales are down 18.1 percent, with both the LaCrosse and Verano falling by over 40 percent each. The Encore was the only Buick model to show an improvement in sales – 33.4 percent.
• Cadillac’s fall was slight at 3.1 percent, but any loss in retail sales merely compounds the “Cadillac problem.” While the Escalade traditionally has strong sales, for June 2015 it fell by 20.2 percent compared to the same time last year. The ATS fell by a mild 6.2 percent, but the CTS continues its suffering with a 29.4 percent fall. Could it get worse? The CTS’s sales fell from June to July 2014, so let’s hope 2015 doesn’t share the similar conditions.
• Chevrolet’s retail sales also fell slightly at 3.9 percent. As mentioned before, the Silverado ended up picking up the weight (no pun intended), but the Suburban and Tahoe bombed at 54.5 and 44.5 percent, respectively. The Impala was equally as bad with a 41.5 percent decline compared with June 2014. The Chevy with moxie, the Volt, fell 31.1 percent. But it wasn’t all bad in Warren as the Camaro – fresh from an announcement of its replacement – was up 11.5 percent. Even the Holden-based SS, a car that is so good yet nobody knows it, was up 63.1 percent.
• GMC has the benefit of being a truck/van/SUV brand, so it should be no surprise that its retail sales were up 8.0 percent. However, that doesn’t mean GMC didn’t suffer, as the Yukon twins and the Terrain posted moderate losses; the Savanna fell by 40.5 percent thanks to the aforementioned decline in rental deliveries plus fleet sales.
General Motors claims ATPs are approximately $34,000, which is up $880 per unit compared to a year ago; for the calendar year to date, ATPs are up more than $1,300 compared to Jan-June 2014.
There are other silver linings hiding within:
• Cadillac is proof that good product is not enough. We all know marketing is trying to gain traction with Cadillac’s raison d’etre, and then there’s an impending (and symbolic) move to NYC. If you think Cadillac’s transformation ended with solidifying the “Art and Science” philosophy, you should wait 10 more years.
• Chevrolet will have impressive new Camaro, Cruze, Malibu, and Volt models in due time, rejuvenating showrooms. Plus, new cars equal fewer incentives equal more profit.
• The current Chevrolet and GMC trucks are putting up a good fight against the all-new F-150, and an upcoming facelift should tide things over till the redesign arrives in 3+ years.
• Buick’s renaissance continues but has stalled as of late, with a portfolio long in the tooth compared to other GM brands. Patience should bring rewards with a redesigned LaCrosse, Verano, and all-new Cascada and Envision . . . but, admittedly, patience also gives opportunities for competing brands.
Certainly a ton of mixed messages for June 2015, but observing from a macro manner suggests the bean counters should be happy despite the rest of us thinking the sky is falling.