Frigid Weather Chills GM January Sales

CHICAGO – The frigid temperatures engulfing the Midwest and Northeast partially may be to blame for General Motors Corp.’s disappointing January sales results, a company executive says.

GM’s sales in January declined 1.9% to 299,050 compared with the 293,086 cars and trucks delivered in like-2003. While the sales decrease is small, it is frustrating for GM, which wanted to avoid repeating the slow start it experienced during early 2003. (See related story: No Panic at GM Despite Sluggish January)

GM blamed the soft sales results during the winter of 2003 for the auto maker’s first annual market share decline since 2000.

Last month, GM expanded its use of 0% financing incentives and introduced the “Hot Button” vehicle giveaway to increase showroom traffic. But the efforts failed to rescue GM’s sales from the winter doldrums.

“The month got off to a great start,” says GM North America President Gary Cowger here at the Chicago auto show. “We were tracking at a 17.2 million (seasonally adjusted annual selling rate). It looked like it was going to be a terrific month, (but) in the next 10-12 days we just stopped.

“I’ve been in this (industry) too long to blame the weather. But if you look at where we really slowed down it was (GM’s) North Central and Northeast (regions). We were way off in those two regions.”

According to the Midwest Regional Climate Center, temperatures in the region plunged Jan. 6-7, and almost all of the Midwest was more than 10° F (12° C) below normal during the last week of January.

Cowger notes January sales volume typically is one of the lowest monthly totals of the year, making even a slight sales dip more dramatic. “I think 10,000 units will swing you a whole (market) share point,” Cowger says. “So January is probably the most sensitive month for volume.”

While the sales results were a disappointment, Cowger isn’t displeased with the “Hot Button” program, which kicked off Jan. 5 and aims to give away 1,000 vehicles to consumers over 56 days.

Car buyers have a chance to win by visiting a participating dealership and pushing the OnStar Hot Button in a specially designated vehicle. The OnStar advisor will tell them immediately if they are a winner.

GM has given away about 400 vehicles so far. “I never got into Hot Button to sell cars,” says Cowger, noting the program is accomplishing its goal of driving traffic into showrooms.

“We’re getting about 40,000 average pushes a day,” he says. “All of the dealers are saying: ‘We’re seeing new faces. People are coming in.’ That’s good. Do I wish we’d sell more cars with it? Probably. But I think we’ll have much better sales leads as we go into the spring selling season.”

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