GM’s February U.S. Sales Soften

General Motors sees its U.S. sales pause in the second month of 2016, citing a planned reduction in fleet sales, but the automaker reiterates a bullish outlook for the remainder of the year on the strength of economic fundamentals and stable fuel prices.

GM’s daily sales fell 1.5% in February to 227,825 units from 231,378 cars and trucks in like-2015, according to WardsAuto data. There were 24 selling days last month, same as year-ago.

“Our strategy is simple: grow profitable retail share while maintaining discipline with inventory levels and incentive spending, while reducing rental deliveries,” says Kurt McNeil, vice president-U.S. sales operations at GM.

The automaker says deliveries to rental companies, historically the least profitable sales channel in the U.S., declined 39% last month, or roughly 16,500 units. The planned cutback is expected to bring GM’s fleet-sales mix this year down to about 20% of overall sales, compared with a historical average of between 22% and 24%, the automaker says.

Last year, GM trimmed 50,000 sales from its rental business and through the first two months of 2016 those deliveries have been carved by 30,000. Retail sales, meanwhile, rose 7%, GM says, to 179,958.

But overall demand for the automaker’s pickups, SUVs and CUVs – three segments where GM markets many redesigned or all-new models – were relatively soft. Pickup sales slid 2.1%, SUV deliveries tumbled 4.3% and CUVs dipped 3.8%, although GM saw especially strong sales in those segments last February.

Sales of bread-and-butter products such as the Chevy Silverado large pickup, Suburban and Tahoe large SUVs, Traverse large CUV and Equinox midsize CUV all retreated in the month. Notable exceptions included the all-new Chevy Colorado midsize pickup and Chevy Trax small CUV, which increased 12.7% and 26.0%, respectively.

Brand sales ticked down 0.7% at Chevrolet and GMC deliveries sank 6.8%, while sales at Buick advanced 2.3% on demand for the Enclave large CUV and Encore small CUV. Cadillac posted a 0.9% hike, as buyers snapped up the Escalade large SUV and SRX midsize CUV.

GM’s Mohatarem says U.S. economic strength underpins optimistic outlook.

GM cars posted a surprisingly strong month, as sales grew 0.9% year-over-year compared with a 2.6% decline in light trucks. Much of the uptick in cars, where Detroit Three automakers typically struggle against import competition, can be tracked back to the redesigned ’16 Chevy Malibu. The critically acclaimed redo rallied sales 53.3% to 21,418 from 13,971.

The automaker says average transaction prices in February were $34,200, up $680 from January and more than $3,600 better than the industry average. GM’s incentive spending as a percentage of ATPs was 12.4%, a reflection of fewer discounts on trucks and juicier spiffs on a number of car lines soon to be replaced by redesigned models, the automaker says.

GM captured an estimated 16.9% of the market in February, down from 18.5% year-ago.

The automaker says it remains bullish on 2016.

“We continue to be optimistic about the continued strength of the U.S. economy,” says GM Chief Economist Mustafa Mohatarem. “Employment remains strong, interest rates remain at historically low levels and gas prices are stable, so we expect auto sales to remain strong for the foreseeable future.”

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