What Market Slowdown? GM Full-Size SUV Sales Jumped 59 Percent In October

Timothy Cain
by Timothy Cain

America’s auto industry has now reported year-over-year sales declines in three consecutive months. The size of the market was 3.5 percent smaller in the August-October period of 2016 than during the same stretch in 2015.

Yet during the same period, U.S. sales of General Motors’ six full-size SUVs jumped 39 percent, a rate of success that throws pie in the face of an industry that’s now fading.

In October, however, the market’s fade became much more apparent. Industry-wide sales slid 6 percent, year-over-year, the worst monthly downturn since the recession. Yet at the same time, General Motors reported a 59-percent surge in full-size SUV volume worth nearly 12,000 additional sales.

BACKGROUND


Of course, the market’s October slowdown wasn’t as severe as it appears, and GM’s full-size SUV uptick is likewise not as inexplicable as it first appears.

The auto industry’s seasonally adjusted annualized rate of 18 million units was the highest of any month this year and higher than all but three months last year. The quirky auto sales calendar — “October 2015” extended two days into November; October 2016 was two days shorter — also means the daily selling rate grew 1 percent, year-over-year. Achieving this level of volume wasn’t easy — the average per-vehicle incentive in October 2016 was 16 percent higher than in October 2015.

As for GM’s extraordinary full-size SUV growth, big discounts on remaining 2016s played a factor, as did a huge increase in fleet volume. Automotive News reports that the average transaction price among the Chevrolet/GMC quartet was $2,470 lower than the year-to-date average in October. Fleet volume, meanwhile, quadrupled to form 32 percent of the Chevrolet/GMC full-size SUV total, Automotive News reported.

DEMAND


Modern full-size SUV fleet volume, remember, isn’t tarnished by the old reputation of fleet sales tied exclusively to daily rental companies. GM told AN that the huge uptick in fleet sales was linked to commercial and government fleet, higher-margin fleet avenues for vehicles that already produce huge profits.

Yet a 33-percent surge in retail sales of the dual Chevrolet/GMC twins makes clear that the huge October increase in overall GM full-size sales reflected real demand. These huge figures weren’t merely the result of GM’s need to clear out of stock.

Fully 12 percent of the new vehicles sold by General Motors in October were Cadillac Escalades and ESVs, Chevrolet Tahoes, Chevrolet Suburbans, and GMC Yukons and XLs, up from 7 percent a year ago. With the full-size pickup trucks on which these SUVs are based suffering an 8-percent sales decline in October, GM produced nearly one-third of its K2XX-platform volume with SUVs. A year ago, the SUVs generated barely more than one-fifth of that overall full-size volume.

GM VehiclesOctober 2016YOY % Change10 Months 2016YOY %ChangePassenger Cars69,835-14.1%732,928-7.5%Other SUVs/Crossovers72,892-1.1%660,143-9.5%Full-Size Pickup Trucks64,818-7.6%654,814-2.7%Full-Size SUVs31,21359.2%226,62015.5%Midsize Pickup Trucks13,36341.0%120,61626.8%Commercial Vans6,505-25.9%75,902-1.1%Total258,626-1.7%2,471,023-3.6%

COMPETITION? WHAT COMPETITION?


In the sector controlled by the Chevrolet/GMC quartet, full-size volume brand SUVs, GM’s market share shot up to 81 percent in October 2016, up eight points from the year-ago period.

At the top of the leaderboard, Chevrolet Tahoe sales jumped 81 percent to 11,976 units, enough to make the Tahoe America’s 13th-best-selling SUV/crossover overall.

Gone are the glory days — the Tahoe ranked fourth overall as recently as 2007. But sales of the Tahoe were higher in October 2016 than at any point in the last nine years. October was just the seventh month in the last 106 that Tahoe volume climbed into five-digit territory.

So where’s our Buick Encounter?

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.

[Image: General Motors]

Timothy Cain
Timothy Cain

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  • Frylock350 Frylock350 on Nov 09, 2016

    I'm in the market for a Suburban and this isn't going to help me get a good deal.

  • Kmars2009 Kmars2009 on Nov 09, 2016

    Although these are good looking Utes, I understand their quality is rated one of the top 10 worst. Not surprising for a GM product. I guess checking carcomplaints.com, before purchasing, would be your best bet. I look at former gen trucks, and see them looking like junk already.

    • Xcalibur255 Xcalibur255 on Nov 09, 2016

      The new 8-speed transmissions are the primary reliability issue. The lower trim levels that still have the 6-speed are more reliable ironically.

  • Cprescott This is what happens when you are an early adopter. You are a test subject. Why do Toyoduh (and Honduh) owners feel so entitled?
  • Kosmo Love it. Can I get one with something other than Subaru's flat four?
  • M B When the NorthStar happened, it was a part of GM's "rebuilding" of the Cadillac brand. Money to finance it was shuffled from Oldsmobile, which resulted in Olds having to only facelift its products, which BEGAN its slide down the mountain. Olds stagnated in product and appearances.First time I looked at the GM Parts illustration of a NorthStar V-8, I was impressed AND immediately saw the many things that were expensive, costly to produce, and could have been done less expensively. I saw it as an expensive disaster getting ready to happen. Way too much over-kill for the typical Cadillac owner of the time.Even so, there were a few areas where cost-cutting seemed to exist. The production gasket/seal between the main bearing plate and the block was not substantial enough to prevent seeps. At the time, about $1500.00 to fix.In many ways, the NS engine was designed to make far more power than it did. I ran across an article on a man who was building kits to put the NS in Chevy S-10 pickups. With his home-built 4bbl intake and a 600cfm Holley 4bbl, suddenly . . . 400 horsepower resulted. Seems the low hood line resulted in manifolding compromises which decreased the production power levels.GM was seeking to out-do its foreign competitors with the NS design and execution. In many ways they did, just that FEW people noticed.
  • Redapple2 Do Hybrids and be done with it.
  • Redapple2 Panamera = road porn.
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