OREANDA-NEWS. June 02, 2016. General Motors (NYSE: GM) sold 190,613 vehicles in May to individual or “retail” customers, down 13 percent from last May, largely due to two fewer selling days and very tight supplies of new launched products.  Based on industry estimates, GM’s retail sales were in line with industry performance.

Customer demand has significantly exceeded supply for new vehicles like the Malibu, Cruze, XT5 and CT6.  GM’s full-size utilities, mid-size pickups and small crossovers continued to show strength in the retail marketplace with double-digit increases for Chevrolet Suburban and Tahoe, GMC Yukon and Yukon XL, Cadillac Escalade, Chevrolet Trax, Buick Encore and GMC Canyon. 

“The demand has been so strong for our new launch products, there’s no question we could’ve sold more, however, production was impacted at Fairfax, Lordstown and Spring Hill by the Japanese earthquakes,” said Kurt McNeil, GM vice president of Sales Operations.  “Current dealer inventories for launch products are about half of what we’d like for launch products, but availability is improving, which sets us up well for the second-half of the year.”

Through the first five months of the year, GM retail sales are up more than 1 percent and GM retail share is up 0.6 percentage points, the largest retail share increase of any full-line automaker.   Year to date, Chevrolet retail sales are up 3 percent and retail share has grown 0.6 percentage points.   Chevrolet remains the fastest growing full-line brand in the industry.   Year to date, Buick retail deliveries have grown 5 percent and Buick has gained 0.1 percentage points of retail share. 

GM’s Commercial deliveries were up for the 31st consecutive month while daily rental sales were down 21,753 vehicles or 49 percent from last May as planned.  GM total sales were down 18 percent to 240,450 vehicles, driven largely by the planned rental reduction and two fewer selling days in May 2016 compared to May 2015.

The all-new Malibu continues to gain share in a very competitive segment, with retail share doubling to more than 10 percent year to date.  In May, Malibu’s average transaction price or ATP was up significantly compared to the previous generation model.  The all-new Cruze is also off to a strong start.  According to J.D. Power PIN data, Cruze’s May retail share was up 2 percentage points to approximately 9 percent and Cruze’s ATP was up substantially from last year.  In May, the all-new Cruze accounted for 85 percent of the Cruze retail sales compared to 53 percent in April.

“We continue to execute our retail-focused sales strategy and maintain disciplined inventories and incentive spending with great products” said Kurt McNeil, U.S. vice president of Sales Operations.  “Our incentives continue to be well below our domestic and many Asian competitors.  Also, our rental reduction strategy is clearly divergent from our key competitors and it’s playing a critical role in our efforts to strengthen our brands, improve our residual values and build the fundamental health of our business.”

Chevrolet Silverado and GMC Sierra’s performance in the marketplace are prime examples of GM’s retailed focused strategy.   Year-to-date, Silverado and Sierra retail sales are up 1 percent and 6 percent, respectively, while having the lowest incentive spend and the best-managed inventories in the fiercely competitive, full-size pickup segment.  In May, Silverado and Sierra had their highest ATP ever on record.

GM continues to reduce daily rental deliveries.  Year-to-date, GM’s rental deliveries are down more than 82,000 vehicles from a year ago.  May represented the largest single monthly decline of 2015 – 2016. 
Through its retail-focused strategy, GM continues to capitalize on a strong, stable economy.

“We expect key economic indicators like historically low interest rates, rising wages, stable fuel prices and strong employment to continue for the foreseeable future,” said Mustafa Mohatarem, GM’s chief economist.  “These positive economic factors point toward continued strong auto sales as the industry works its way toward another record year of sales.”


May Retail Sales and Business Highlights vs. 2015 (except as noted)

Chevrolet

  • Malibu, Spark and Volt were up 4 percent, 40 percent and 19 percent, respectively.
  • Year to date, Malibu had its best retail sales performance since 1981.
  • Colorado was up 9 percent and had its best retail May and year-to-date sales performance since 2005.
  • Suburban and Tahoe were up 38 percent and 16 percent, respectively
  • Trax was up 19 percent.
  • Silverado had its highest ATP ever on record for any month.
  • Silverado’s year-to-date retail sales of 185,123 are the best since 2007.
  • Suburban’s year-to-date retail sales of 14,268 are the best since 2008.

GMC

  • GMC’s May ATP were up more than \\$3,000 or 7 percent from last year, driven by Sierra Denali’s penetration.
  • Denali penetration was 26 percent in May.
  • Canyon was up 17 percent for its best May ever.
  • Sierra was up 6 percent year-to-date.
  • Yukon and Yukon XL were up 15 percent and 14 percent, respectively
  • Yukon has had 9 consecutive months of year-over-year growth

Buick

  • Encore was up 26 percent, marking 29 consecutive months of retail sales growth.

Cadillac

  • Escalade was up 17 percent.
  • Cadillac dealers delivered 2,717 XT5s.
  • CT6 deliveries were 694.

Average Transaction Prices (ATP)/Incentives (J.D. Power PIN estimates)

  • GM’s ATPs, which reflect retail transaction prices after sales incentives, were \\$35,722 in May, nearly \\$4,600 above the industry average.
  • GM’s incentive spending as a percentage of ATPs was 9.8 percent in May, well below domestic and many Asian competitors and below the industry average of 10.6 percent.

Fleet and Commercial

  • GM’s fleet mix in May was approximately 21 percent of total sales, in line with the company’s full-year guidance of 20 percent.
  • Commercial sales grew 1 percent, compared to last May.  Calendar year-to-date, Commercial sales are up 6 percent.
  • State and local government sales were up 15 percent in May.  Total government sales are up 10 percent calendar-year-to-date.

Industry Sales

  • GM estimates that the seasonally adjusted annual selling rate (SAAR) for light vehicles in May was 17 million units. On a calendar-year-to-date basis, GM estimates the light vehicle SAAR was 17.2 million units.

General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com

Forward-Looking Statements
In this press release and related comments by management, we use words like “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “will,” “should,” “target,” “when,” “would,” or the negative of any of those words or similar expressions to identify forward-looking statements that represent our current judgment about possible future events. In making these statements we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors, both positive and negative. These factors, which may be revised or supplemented in subsequent reports filed with the SEC, include, among others: (1) our ability to maintain profitability over the long-term, including our ability to fund and introduce new and improved vehicle models that are able to attract a sufficient number of consumers; (2) the success of our full-size pick-up trucks and SUVs; (3) global automobile market sales volume, which can be volatile; (4) the results of our joint ventures, which we cannot operate solely for our benefit and over which we may have limited control; (5) our ability to realize production efficiencies and to achieve reductions in costs as we implement operating effectiveness initiatives throughout our automotive operations; (6) our ability to maintain quality control over our vehicles and avoid material vehicle recalls and the cost and effect on our reputation and products; (7) our ability to maintain adequate liquidity and financing sources including as required to fund our new technology; (8) our ability to realize successful vehicle applications of new technology and our ability to deliver new products, services and customer experiences in response to new participants in the automotive industry; (9) volatility in the price of oil; (10) the ability of our suppliers to deliver parts, systems and components without disruption and at such times to allow us to meet production schedules; (11) risks associated with our manufacturing facilities around the world; (12) our ability to manage the distribution channels for our products; (13) our ability to successfully restructure our operations in various countries; (14) the continued availability of wholesale and retail financing in markets in which we operate to support the sale of our vehicles, which is dependent on those entities' ability to obtain funding and their continued willingness to provide financing; (15) changes in economic conditions, commodity prices, housing prices, foreign currency exchange rates or political stability in the markets in which we operate; (16) significant changes in the competitive environment, including the effect of competition and excess manufacturing capacity in our markets, on our pricing policies or use of incentives and the introduction of new and improved vehicle models by our competitors; (17) significant changes in economic, political, regulatory environment and market conditions in China, including the effect of competition from new market entrants, on our vehicle sales and market position in China; (18) changes in existing, or the adoption of new, laws, regulations, policies or other activities of governments, agencies and similar organizations, particularly laws, regulations and policies relating to vehicle safety including recalls, and including such actions that may affect the production, licensing, distribution or sale of our products, the cost thereof or applicable tax rates; (19) stricter or novel interpretations and consequent enforcement of existing laws, regulations and policies; (20) costs and risks associated with litigation and government investigations including the potential imposition of damages, substantial fines, civil lawsuits and criminal penalties, interruptions of business, modification of business practices, equitable remedies and other sanctions against us in connection with various legal proceedings and investigations relating to our various recalls; (21) our ability to comply with the terms of the DPA; (22) our ability to manage risks related to security breaches and other disruptions to our vehicles, information technology networks and systems; (23) significant increases in our pension expense or projected pension contributions resulting from changes in the value of plan assets, the discount rate applied to value the pension liabilities or mortality or other assumption changes; (24) our continued ability to develop captive financing capability through GM Financial; and (25) changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could have an effect on earnings.

We caution readers not to place undue reliance on forward-looking statements. We undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where we are expressly required to do so by law.