GM Sales Scuffle in May

The automaker sold 240,450 cars and trucks last month, compared with 293,097 in the same period last year, according to WardsAuto data.

James M. Amend, Senior Editor

June 1, 2016

3 Min Read
Sales of GM large SUVs such as Chevy Tahoe rebound in May
Sales of GM large SUVs, such as Chevy Tahoe, rebound in May.

General Motors’ U.S. daily sales tumble 11.1% in May, as the automaker continues to de-emphasize deliveries to rental-car companies and a supply-chain disruption limits availability of some key products.

GM sold 240,450 cars and trucks last month, compared with 293,097 in the same period last year, according to WardsAuto data. There were two fewer selling days vs. May 2015.

Last month marked GM’s sharpest pullback in rental business since it instituted a new strategy and so far this year the Detroit automaker has pumped 82,000 fewer units into the sales channel, which historically is less profitable than retail sales.

GM also reports constrained stocks of its freshest offerings, such as the Chevrolet Malibu midsize sedan and Cadillac XT5 CUV, because assembly plants producing the redesigned vehicles were idled in April when an earthquake in Japan disrupted the automaker’s supply chain.

“The demand has been so strong for our new launch products, there’s no question we could’ve sold more,” says Kurt McNeil, vice president-sales operations at GM.

“Current dealer inventories for launch products are about half of what we’d like for (those) products, but availability is improving, which sets us up well for the second half of the year,” he says in a statement, noting retail sales at the automaker were level with the industry.

McNeil says GM’s retail-focused sales strategy is meant to strengthen the automaker’s four brands, improve residual values of its cars and trucks and fortify business fundamentals. However, the change has come at the expense of market share, which through the first five months of the year was down to 16.8% from 17.8% in the same period last year.

GM assembly plants in Kansas, Ohio and Tennessee resumed work May 9 after supplies of undisclosed electronics produced solely in Japan strengthened.

Despite the crimped availability, Malibu sales rose 22.2% to 24,202 from 21,461. Sales of the redesigned Chevy Cruze compact car, which also is built at one of the plants affected by the parts shortage, plunged 24% to 16,671 from 23,752.

Deliveries of GM’s best-selling Chevy Silverado large pickup, a product unaffected by the shutdowns, were off 5.5% to 45,035 from 51,602. The Chevy Tahoe saw a strong month, though, with deliveries rising 13.1% to 7,430 from 7,119.

Overall, monthly sales at Chevrolet slipped 11.8% to 169,330 from 207,970.

Sales of the newly released but inventory-strapped Cadillac XT5 were limited to 2,719 copies, or more than 3,000 fewer units than the model it replaces delivered a year ago. The 5-passenger luxury CUV is Cadillac’s best-selling model. The all-new CT6 accounted for 697 deliveries last month, as the large sedan begin populating dealer lots.

Cadillac sales dipped 9.0% to 12,099 from 14,408 in April.

GMC sales fell 7.2% to 43,395 from 50,657. Deliveries of the Sierra large pickup were flat year-over-year at 17,642, while sales of the Yukon large SUV gained 17.5% to 3,747 from 3,455.

Buick sales sank 15.6% to 15,626 from 20,062, as demand for its sedans remained lackluster. However, sales of the Encore compact CUV, which competes in one of the industry’s hottest segments, rose 30.8% to 6,522 from 5,400 and was the brand’s best-selling product in the month.

GM Chief Economist Mustafa Mohatarem says the automaker expects strong economic fundamentals such as low interest rates, rising wages, stable fuel prices and positive employment rates to continue.

“These positive economic factors point toward continued strong auto sales as the industry works its way toward another record year of sales,” he says.

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