Last month's recall of all-new '02 Chevrolet Trailblazer, GMC Envoy and Oldsmobile Bravada midsize sport/utility vehicles (SUVs) took some wind out ofCorp.'s sails during April, says Paul Ballew, executive director-Market and Industry Analysis.
A similarly timed recall of DaimlerChrysler Corp.'s new minivans affected a month's production, but sales still increased 6%, says Gary Dilts, vice president-sales.
Last month, GM recalled 6,000 of the GMT360 SUVs due to defective suspensions and halted production for 10 days to fix the problem. Prior to April, Mr. Ballew says, GM had been gaining retail share in the midsize SUV segment, but the recall and the short supply of the outgoing models the GMT360s were designed to replace, left dealers with too few vehicles to sell last month.
“We had a very good first quarter with the old sport/utilities, and inventories were reduced,” Mr. Ballew says. “So there was not a lot of product at dealers to offset the 360 recall.” The result was a sharp drop in sales of Blazer (-35%), Jimmy (-53%) and Bravada (-53.8%).
Mr. Ballew says GM will continue to feel the effects of the recall in early May, but the pipeline should be refilled by June. He wouldn't say how many unit sales may have been lost or whether those might be recovered by year's end.
The number of units was “significant,” he says. “There was an impact on share. There's always a great debate in any given month whether this will be part of spilt milk. But for us, for the first time in a long time, we feel we're competitive. And whether some buyers deferred their purchases or we have to go out and conquest sales from other manufacturers, we feel good about our competitive position.”
Meanwhile, at DCC, a bigger impact on April sales was a problem with a new dealer incentive program that had the adverse effect of prompting some worried dealers to order fewer vehicles instead. The “hiccup,” as it was described by DCC President Dieter Zetsche, is being resolved: a new set of sales targets for the next three months. Mr. Dilts says the resolution was reflected in a torrid sales pace for the last 10 days of the month. “I can't tell you how long you have to go back to find a week that high.”
DCC introduced a new round of incentives last week on vehicles identified as needing surgical help, including much of the car line.