Big Crossover Sales, ATP Increases Guide General Motors Through July Sales Declines
To look at General Motors’ sales volume in July, one might call it a bad month. It certainly wasn’t a particularly good one: total sales dipped 15.4% with 226,107 vehicles sold, retail sales fell 14.4% with 202,220 vehicles sold, and all four of its brands saw total and retail sales declines across the board.
But, hey, here’s a bright spot for you: sales of crossovers and trucks accounted for 80% of those sales, which in turn led brand-wide ATPs (average transaction prices) to increase by about $1,000 per vehicle to $36,000 a head. Given the expectation that GM will discontinue a number of its sagging sedans in order to bolster crossovers, SUVs, and trucks, it is not entirely outside the realm of possibility that volume decreases and higher crossover/truck percentages will become the norm.
“We have strategically decided to reduce car production rather than increase incentive spending or dump vehicles into daily rental fleets, like some of our competitors,” said Kurt McNeil, US vice president of Sales Operations. “We are working hard to protect the residual values of our new products and growing quality retail and commercial sales, and July’s ATPs reflect that discipline.”
“Changing customer tastes have driven us to refocus our business on higher margin, faster-growing segments, like the crossover segments. We are launching the most all-new crossovers in our history to take full advantage of the changes occurring in the U.S. marketplace,” added McNeil. “Our newest crossovers are performing very well in the marketplace and we’ll build on that momentum with the all-new Chevrolet Traverse, GMC Terrain, Buick Enclave, and the introduction of the Regal TourX through the second half of 2017.”
Indeed, July was a big month for key crossovers. Total sales of the Chevrolet Equinox were up 7.5% at 23,524 vehicles delivered; Chevrolet Bolt sales totaled 1,971 vehicles, good for its best month ever as it begins a nationwide rollout this month; GMC Acadia sales were up 30.3% with 9,722 vehicles delivered; Buick Envision sales were up 97.9% with 2,812 vehicles delivered; and Cadillac XT5 sales were up 11.2% with 5,504 vehicles delivered. All of the aforementioned crossovers set new retail bests for the month of July.
With the addition of new products over the next five months, GM anticipates that it will rebound nicely.
“US auto sales continue to moderate from last year’s record pace, but key U.S. economic fundamentals remain supportive of strong vehicle sales,” said Mustafa Mohatarem, GM chief economist. “Under the current economic conditions, we anticipate the second half of 2017 will be much stronger than the first half.”
Through July, GM’s total sales are down 3.8% at 1,640,553 vehicles delivered. Retail sales are down 2.8% at a total of 1,335,265 vehicles delivered.