They’re Baa-ack! GM SUV June Sales Soar on Heavy Discounting
1 July 2005
Boosted by heavy discounting, GM sales jumped 41% (on an adjusted sales day rate basis) in June compared to the prior year to deliver the best overall sales month since September 1986. Countering the trend still experienced by other automakers, GM SUVs turned in an even more aggressive 66% improvement in sales. (Chart at right, Click to enlarge.)
GM’s full-size pickup truck deliveries were up 102%, with all truck sales posting an increase of 68%. Car sales (175,491) increased 4%, with several new vehicles, including Cadillac STS, Chevrolet Cobalt, Pontiac G6 and Buick LaCrosse, posting record sales results. And HUMMER had its best sales month ever.
During June, GM extended its employee discounts to all buyers.
We had great results across the board in June, and our truck business was exceptionally strong. We see this as an indication that America’s desire for trucks and SUVs is still a strong force in the marketplace. It’s really pretty simple—offer great vehicles that people want, match that with outstanding value, and you’ll get great results.—Mark LaNeve, GM vice president, North America Vehicle Sales, Service and Marketing
“The demise of the full-size truck is a figment of the imagination of the popular press. Everybody assumes it is true but the market is still buying,” GM Vice Chairman Bob Lutz told reporters after addressing a business lunch in Switzerland. (Reuters)
Ford, DaimlerChrysler and Toyota saw sales of their full-size SUVs continue to drop in June, while Nissan and Isuzu posted gains. For the first half of the year, even after factoring in GM’s June results, only Nissan shows a gain in full-size SUV sales from the prior year.
Combined sales of full-size SUVs in the first half of 2005, again, including GM’s gains in June, are off 10.6% at 815,617, down from the 911,911 sold during the same period last year. (That is also 8.8 times the number of hybrids sold during the same period this year.)
Although the promotion gave GM an immediate boost in market share, and cleared out excess inventory, it also raised concern among some on Wall Street over the impact on second quarter earnings and cash flow.
One of the questions outstanding is what happens once GM opts not to discount so heavily.
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