GM's challenge remains a delicate balance among incentives, share and - eventually - profits.
Chevrolet, Buick, GMC and Cadillac dealers the U.S. reported sales of 138,849, up a combined 32% compared to February 2009. General Motors Company attributed the moderately positive results by the continued strong growth of new GM crossovers and passenger cars.
Retail sales for GM’s four brands were up 7% percent for the month, attributed to strong consumer demand for GM’s crossovers.
February retail sales of GM’s newest crossovers – Chevrolet Equinox, GMC Terrain and Cadillac SRX – were up 198% compared to the vehicles they replaced.
This was the seventh month in a row that retail sales of these vehicles were up more than 100%. However it wasn’t enough to keep GM in the number one sales spot in the U.S. market as a surging Ford Motor Company edged it out of first place.
However, retail sales of all eight brands, when compared with last February, were down 9%. There are millions of owners from the canceled Pontiac, Saturn, Hummer and Saab brands, and it is not clear that GM is capable of winning them back.
The large increase in fleet sales (+32%) also works counter to a long standing GM weakness – residual values of its vehicles, which increase the cost of ownership, that executives are attempting to address.
Chevrolet had a bad month in the sale of full-size pick-up trucks, as GM backed off of incentives, and this cost it the number one U.S. sales leadership spot.
GM’s challenge remains delicate balance between incentives, which effect so called “actual transaction prices” and profitability, versus aggressive use of incentives to regain market share.
More to come on this as GM will announce a new incentive program.