General Motors' 2017 U.S. Auto Sales Forecast Adjusted (Downward)
General Motors no longer expects the U.S. auto industry to collect more than 17.5 million new vehicle sales in 2017.
GM’s chief financial officer, Chuck Stevens, revisited the automaker’s U.S. sales forecast and turned the wick down from the mid-17-million-unit range, according to Automotive News, to the low-17-million-unit range.
That’s not a low number. In fact, 2017’s reduction of some 300,000 sales across the industry, year-over-year, would produce the second-best year for auto sales since 2001.
But reduced demand is complicating matters for the entire industry, most particularly for large automakers with excessive inventory.
Heading into 2017, General Motors had a reasonable 71 days of supply, but that figure ballooned to 107 days by the end of January and was still at 97 days at the end of the first-quarter.
At the beginning of June, General Motors’ supply ran to 101 days as the company seeks to dramatically reduce fleet sales and maintain a reasonably strict on incentives.
But General Motors is feeling the pressure.
High-profile cars are struggling.
The Chevrolet Malibu, a star for GM in 2016, is down 30 percent this year.
The Chevrolet Impala, after plunging below 100,000 annual sales in 2016 for the first time since 1999, is down by more than a third through 2017’s first five months.
At Buick, with the Verano (formerly Buick’s top-selling car nameplate before being discontinued) car sales are down 41 percent as the new LaCrosse fails to pick up any steam.
Cadillac, meanwhile, has suffered a 14-percent drop in car sales despite the addition of the CT6, new at this time last year.
Traditionally able to rely on truck strength when cars faded, General Motors has also seen pickup sales decline in early 2017. Through May, GM’s truck quartet is down 6 percent thanks to decreases from all four nameplates. That’s a loss of more than 20,000 sales.
In this environment, it’s not surprising to see GM’s Stevens tell analysts, “Pricing is more challenging.”
Nevertheless, GM will stick with its disciplined approach, Stevens says, and will attempt to fulfill its goal of dropping inventory to 70-days’ supply by year-end.
According to ALG, GM’s average transaction prices in May 2017 were 12 percent higher than the industry average. GM’s average incentive spend per vehicle as a percentage of the average transaction price, however, was also 12 percent higher than the industry average.
[Image: General Motors]
Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.
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I can remember when anything over 16 million units was a good year.