A disappointing finish to 2013 isn’t tempering the outlook forexecutives heading into the new year: They like where the automaker sits.
GM wrapped up the year with a 2.6% drop in overall daily deliveries in December (one less day this year than last) and disappointing double-digit decline for the new fullsize Silverado pickup. But Kurt McNeil, head of sales operations, focuses on the numerous positives in a conference call with the media and analysts to discuss the automaker’s year-ending results.
“The market is going to continue to grow,” McNeil says, citing rising home values, increasing new-housing starts and a reduction in unemployment. “The biggest reason people are feeling better about the economy is the progress made on the jobs front. That’s the key to releasing even more pent-up demand in 2014.”
More importantly for GM, he says, is the rise in average transaction prices, up $1,500 per unit from year-ago and now at their highest level in history, and gains made in retail market share by all four of its brands in 2013.
“We think we stayed pretty darn disciplined (on incentives),” McNeil notes, saying the automaker’s spiffs fell about $100 against an industry that was flat overall but featured a couple of automakers “that were really competitive.
“We were still able to gain retail share at all four brands and increase our ATPs significantly. So we feel good about the industry; we feel real good about our share and retail performance.”
In addition to a growing market overall in 2014 (GM will release its official forecast later in the month), McNeil also sees an improving opportunity for the automaker in the leasing sector. Returning lessees are headed toward an expected peak of 30,000-40,000 a month as of May.
“The lack of returning lessees has been an issue for us in 2013,” McNeil says. “But that started coming back in November and continues to grow. That’s going to be a huge opportunity for us in 2014. A lot of the other competitors have been working those portfolios pretty hard, and we’re looking forward to that opportunity.”
Inventories also appear in good shape heading into 2014, the executive says, totaling 750,000 units, 30,000 less than at the end of November. “We think that’s a pretty good place.”
McNeil says GM’s December performance was softened by a market hangover caused by its Black Friday deals at the end of November. But traffic picked up after Christmas, he adds, noting it did so without any additional marketing or incentive spending.
“We don’t overreact to short-term (trends),” he says. “Without a doubt, it’s better to stick to our own playbook.”
The sluggish Silverado performance that saw demand fall 12.6% daily is being blamed on available mix as the new ’14 model rolls out and stiff competition from the outgoing ’13F-Series, which GM says carried significantly higher spiffs.
McNeil says his company’s fullsize pickup incentives fell nearly $1,000 year-over-year, while industry spending was down $500 and’s rose $250.
“(Ford continues) to sell down its ’13 model pretty aggressively,” he says. “(But) we were able to gain share month-over-month, so we feel good about that.”