Strong demand for the Chevrolet Equinox helps GM report a 13% October sales increase.
General Motors, soon to launch its long-awaited IPO, is having a very good morning, reporting its third quarterly profit in a row – and a 13% jump in sales by its four surviving North American brands for October.
In an unusual situation, manufacturers have spread out over two days their monthly sales reports, and key makers such as Toyota, Honda and Ford have yet to release their final figures, but preliminary figures show that despite the public’s worry about the economy – which showed up unmistakably in Tuesday’s election results – October brought the industry its best month of the year.
Overall sales numbers are trending towards 1 million vehicles for domestics and imports, about 12.4 million on a seasonally-adjusted annual rate, or SAAR, which would be the highest level in two years, according to GM’s sales vice president Don Johnson.
“The story we see, this month, is a little brighter,” said Johnson, during a conversation with reporters. While he said the situation should be “tempered” by the economy’s continued struggles, he noted, “Consumer confidence is now stabilizing and consumers now believe they have weathered the worst.”
But despite the upturn, significant questions are being raised about the longer-term recovery of the U.S. automotive market, which some observers now suggest may not reach past peaks no matter how the overall economy turns around.
Those now reporting have generally posted double-digit gains, BMW at 12.6%, for example, struggling Jaguar scoring a 40% year-over-year jump thanks to recent product launches, and Porsche seeing a 61.2% gain.
Audi, meanwhile, announced that it had exceeded its previous U.S. sales record, set in October 2008, with an increase of 10.5% last month. The maker says it is on track to beat its full-year record of 93,506, set in 2007, and could reach 100,000 for the first time in the States.
Subaru, meanwhile, gained 25%, bringing its total sales for the first 10 months of the year to 216,334. That’s just 318 vehicles short of beating its all-time record, set in the otherwise dismal 2009.
There were some laggards, last month, Mercedes-Benz reporting a weak 4.3% gain. And some analysts are predicting that the other two domestic makers, Ford and Chrysler, could actually report declines for the month.
But GM’s numbers were good news for a company not only recovering from last year’s bankruptcy but preparing for a critical public stock offering later this month. (Click Here for more.)
All four of the GM divisions posted increases for October. Buick — which many skeptics thought should have been abandoned, along with Hummer, Saab, Pontiac and Saturn, after GM emerged from Chapter 11 – reported a 39% increase, and is up 55% for the calendar-year-to-date. Cadillac rose 15%, GMC 30%. Chevrolet, meanwhile, was up a more modest 7%.
Significantly, GM’s Johnson noted that his company has been able to curb incentives by about $650 this year, while increasing the average transaction price, or ATP, by $3,100 so far this year.
If those trends hold for the rest of the industry it would mean a significant shift for bottom-line performance for makers who have had to give big discounts even as sales volumes have tumbled to the lowest level in decades.
Industry observers continue to debate where the U.S. new car market will go in the year ahead — and beyond, and during his meeting with reporters, GM’s sales chief acknowledged there is a “very realistic” possibility that volumes won’t reach past peaks, topping 17 million, any time soon.
Even with an economic recovery slowly underway, he said, there has been, “no doubt, a fundamental shift in American (car) buying habits.” So, even replacing many of the vehicles being scrapped, motorists are keeping their vehicles longer and accepting the idea of having fewer cars, trucks and crossovers in their household fleets.
The good news — for GM, anyway — contended Johnson, is that the maker’s business model, post-bankruptcy, allows it to turn a solid profit on significantly lower volumes.
TheDetroitBureau.com will update this report through the day as other major automakers release their sales.