General Motors August Sales Decline 20%

The old ones are gone and the significantly revised 2010 Chevrolet Equinox is a strong seller.

General Motors Company dealers in the United States during August delivered 246,479 vehicles, the company’s highest total in 2009. The August total, when compared with a very strong sales performance in August 2008 from “an Employee Pricing” promotion then and lower fleet sales this year, was down 20%. Overall, retail sales were down 17% while fleet sales declined 29%.

However, when comparing GM’s August total sales with July, volume was up more than 57,000 vehicles, or 30% month-over-month, most of it from the successful Federal “Cash for Clunkers” program.

“The Cash for Clunkers program was certainly a success, but our momentum continues to build on the strength of our new cars and crossovers such as the Chevrolet Malibu, Equinox and Camaro,” said Mark LaNeve, vice president, U.S. sales.

The company estimates that Clunkers pulled 200,000 units ahead from near term sales or about 30%.

It remains a point of debate as to what will happen to sales for the balance of this year. Normally the so-called “pull ahead” effect from incentives of as much as $4,500 is about 50%.

However, Clunkers appears to have added what were used car buyers to dealer traffic and sales, so its longer term negative effects might be less than usual, at least according to normally optimistic sales executives.

It now looks like the seasonally adjusted annual selling rate (SAAR) for August will come in an atypical 14.5 million units, far above the under 10 million rate experienced during all of 2009. It is expected to decline significantly in September again. The question is how much.

“We believe the program was a strong shot in the arm for the economy and that our four core brands – Chevrolet, GMC, Buick and Cadillac – are well positioned with new products to take advantage of the ongoing recovery in the market. Our new vehicles are contributing to our stable market share performance for the past five months – running in the 20% range,” said LaNeve.

It’s believed GM needs a share in that range just to break even, but the taxpayer owned company will not resume reporting financial results until the third quarter.

Core brand (Chevrolet, Buick, GMC and Cadillac) total sales increased 29%.

GM’s California eBay project resulted in 4,000 shoppers who negotiated a new vehicle price in the first three weeks of the program. With more than one million visitors and 1.4 million completed searches so far, GM is extending the eBay program through the end of the month. Retail sales in California were up 63% — roughly three times the national increase in sales. 

“Once the California program winds up, we’ll take a look at the results and determine if we should roll it out nationally later this year,” LaNeve said.

A total of 1,708 GM hybrid vehicles were delivered in the month. So far, in 2009, GM has delivered 11,544 hybrid vehicles.

GM inventories dropped compared with a year ago, and remained significantly below its stated half-million unit goal at historically low levels. At the end of August, about 379,000 vehicles were in stock, down about 357,000 vehicles (or 49%) compared with last year, and down approximately 19% compared with July. GM once had that many pickup trucks alone in inventory. There were about 150,000 cars and 229,000 trucks (including crossovers) in inventory at the end of August, but only 300,000 of them are actually on dealers lots, the rest are in transit.