By on July 1, 2010

Sales of GM’s four “core brands” were up 36 percent last month [release here], however that number is compared to June 2009 sales, when GM was in bankruptcy. Even against this backdrop, however, GM’s sales show some signs of continued weakness. Though Chevrolet gained 32 percent in overall, its retail sales improved a mere 11 percent, meaning a huge number of Chevy’s sales went to fleets. Out of Buick’s 53 percent volume gain, retail sales increased only 28 percent. Cadillac had much less of a fleet problem than Buick and Chevy, increasing sales 339 percent and retail sales 35 percent. GMC did not release retail numbers for GMC, but noted that GM’s overall fleet sales were 59,571 for the month. That means nearly one in three vehicles sold by GM last month went to a fleet, a percentage that accounts for the lion’s share of GM’s sales growth. Once again, Detroit seems addicted to fleet sales…

Needless to ssay, this helps explain why a number of GM’s less-competent products sold as well as they did last month. Aveo, for example, was up 158 percent, to 5,728 units., while Cobalt was up 48 points to 10,141 units. Big trucks and SUVs likely benefitted from fleet sales as well, with Silverado breaking 30k units, Suburban and Yukon XL doubling their sales, and Malibu up 80 percent to 20,720 units.

Of course, GM’s new products helped with the 11 percent retail sales gain. LaCrosse stayed over 5k units last month, for a 173 percent increase over last June. SRX saw a 461 percent increase to 3,804 units, while its Equinox cousin added another 180 percent to 11,490 units. GMC’s Terrain also sold 4,603 units. Traverse added 56 percent to 11,371 units.

But, as is always the case, new products eventually lose their luster, and several of GM’s once hot-selling products are slackening off. Camaro is down nearly 20 percent from its high last June, moving 7,540 units. Enclave and Acadia eased up on their sales growth, adding only 20 and 26 percent respectively over last June’s weak numbers. Sierra saw a similarly stagnant June, improving just 27 percent to 11,441 units. The aging Impala and HHR both suffered 3 percent sales drops, despite likely sending a fair number of units to GM’s booming fleet business.

GM’s hot products continue to drive growth, with heartening signs coming from Buick (staying strong with the LaCrosse) and Cadillac (which benefitted from improved CTS (+31%) and strong SRX sales). Chevy, meanwhile, is likely seeing strong retail growth for its Equinox and Traverse, but it’s dead in the water on the sedan front, with only the Malibu likely making retail progress. With the launch of the Cruze looming, GM had better hope the response is strong, otherwise GM seems destined to grow only as a supplier to fleets. And as The General (and Detroit a large) has already learned, that short term growth always comes at the expense of long-term resale and brand equity.

The numbers are up, but there’s still much work to be done.

GM sales by model chart here (PDF).

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14 Comments on “GM “Core Brand” Sales Up 36 Percent In June On Strong Fleet Sales...”


  • avatar
    tankinbeans

    Aren’t we supposed to start calling Chevy “Chevrolet”?

  • avatar
    Lokki

    At first glance it looks like Buick is doing really well. However I think that we also need to factor the death of Pontiac into the equation. I’d bet that sales that would have gone to Pontiac in the past have simply moved to Buick.

    Further, while GM sales are sucking less than they did last year, they’re sucking more than they did last month.

    The NYT are saying that although G.M. sales increased 11 percent over all compared to a year ago, its sales last month were 13 percent lower than May 2010.

    Ouch.

    http://www.nytimes.com/2010/07/02/business/02autos.html?src=busln

    • 0 avatar

      Month-to-month sales comparisons are meaningless. Rule #1 when reading monthly sales press releases is that you know the news is bad when they talk about improving sales over the previous month, versus the same month in the previous year. Chrysler has been pulling this semantic crap for years as their sales slid…”but Wrangler sales are 5 percent higher than last month.” Left unsaid is that they might have been 30 percent lower than the same month a year earlier.

      The point is, just as they are meaningless comparisons when they are stated in a positive light, they are also meaningless in the other direction due to seasonal variations. Monthly sales figures vary widely throughout the year.

    • 0 avatar
      GarbageMotorsCo.

      Whats sad about this is this time last month Government Motors had declared bankruptcy which was suppodedly their “low point”

  • avatar
    Captain Tungsten (of GM)

    i was wondering what the month-to-month was.

  • avatar
    Samuel L. Bronkowitz

    I would love to see an article here that delved deeper into “fleet sales.” I get why they damage resale value; and, if the fleet cars are crap (like my recent 3-week stint with a Dodge Avenger rental), I get how it hurts the brand in the eyes of the consumer. OTOH *somebody* has to supply those fleets, so why would GM let that money go to other companies? If GM woke up tomorrow and declared NO MORE FLEET SALES wouldn’t Hyundai et. al. just step in and fill the void? If they did, would it damage them the way it has seemingly hurt GM?

    Inquiring minds want to know…

  • avatar
    mjz

    I think Chevy, I mean Chevrolet, is probably gaining more from Pontiac’s demise than Buick.

  • avatar
    tankinbeans

    I’m curious and I’d like some thoughts somehthing.

    First, I wonder if it would be wise for GM to spin GMC off into a Fleet Sales Only division so that it can stop cannibalizing from Buick (if it even does now) and Chevrolet (I’m taking my own bait)? I ask this because the tagline “Professional Grade” screams construction and fleet duty. They could have a van, a large car (looks professional and goons with suits would drive them), and a truck. Then Chevrolet could focus on being the entry level, Buick could focus on being midrange, and Cadillac could be upper level. If these ideas are wrong I’m curious why.

    • 0 avatar
      jaje

      GMC is turning into a GMC / Pontiac mix it seems. They now have a light duty minivanish SUV and now adding an Aveo competitor. Slowly Professional Grade will be mismanaged til it means nothing.

  • avatar
    jaje

    I concur about comparing current sales month to the subsequent month b/c it is completely meaningless. It is just another way to brag about how sales went up if they were down from previous year’s respective month (which is the proper yardstick when comparing a months sales).

    On top of this…GM/Ford/Chrysler do the typical. Sales go up and it is glorious as to how well they are doing. Sales go down and it is not b/c of retail sales but them relying less on fleet sales. Ironic isn’t it that their sales increase was tagged b/c of rise in fleet sales. Gladly I wasn’t born yesterday (I was born the day before yesterday).

  • avatar
    Potemkin

    Comparing current month sales to the same month last year is also meaningless if the model you are speaking of was just starting up last year. If you only built and sold 500 cars in May 2009 and built and sold 1000 cars in May 2010 how can you claim a 100% increase in sales. Of course your going to sell more cars if you build more ( to a point). What would be more informative is sales as a percentage of vehicles built.

    • 0 avatar
      jkross22

      Even more appropriate would be profitability per division or per platform. At least we’d all see what’s working and what’s sucking wind. You’d think with all the bean counters that this would be something they’d know.

  • avatar
    FleetofWheel

    Perhaps GM/Ford/Chrylser could produce fleet only models badged as the Hertz Supreme, Thrifty Runabout, etc. in the same way name brand food companies make store brands for grocery stores.

    They could obscure the similarity to the retail version by altering panels, color schemes and tail lights.

    If they do this on the cheap, it may be a cost effective way to protect their main retail brands.

    Other posters here on TTAC have described the interesting ways that US models were uniquely altered for the Canadian market (for retail sales).

    Eventually, Chinese made cars will probably become the main suppliers for the rental car business. Those agencies will probably want to conceal that fact by using house brands that sound either really anglo or Italian . While car enthusiasts will know the true origin, most consumers will have limited awareness.

  • avatar
    plee

    I just got home to Nashville from a business trip to Tulsa. This morning I walked through the rental lots at Tulsa airport and the predominate cars were Impalas and Chargers with a whole lot of Camrys too. That is where a lot of sales are going these days.


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