December is historically the best sales month of the year for automakers as smart shoppers key in on 2013 models with large incentives designed to move vehicles off the lots for newer 2014 models. Also, in addition to the holiday sales surge, businesses may take advantage of tax write-offs for equipment purchases at the year's end if deemed in their best interests.
With that in mind, General Motors (NYSE: GM ) is trading 3% lower today after December sales results disappointed investors -- and one key model's sales plunged.
In December, General Motors delivered 230,157 vehicles which was a decline of 6% compared to a year ago. Its retail and fleet sales were down 6% and 9%, respectively. While General Motors total deliveries still topped rivals Ford (NYSE: F ) and Chrysler, which posted vehicle sales of 218,058 and 152,367 units, respectively, it was still a disappointing figure.
If you're looking for a bright spot in the sales, you won't find it looking at its overall brand performances. General Motors' Chevrolet and Buick brands were the worst performing, with sales declines of 8.1% and 6.6%, respectively. None of the four GM brands managed to post an increase over last year, with GMC and Cadillac sales declining 1.8% and 0.5%, respectively.
The worst of the news for investors is regarding General Motors' full-size pickup trucks -- which are the freshest designs among competitors and should be driving sales much higher. In December, sales of the Silverado and Sierra, two of General Motors' most profitable vehicles, were down 16% and 4.6% respectively -- that's bad news for investors.
Although there is plenty of bad news to discuss, there were also a couple of bright spots.
Crossover and SUV sales continue to stay strong and GMC's Acadia posted a 53% increase for its best-ever December performance. Also, Chevrolet's new Corvette had its best December since 2006 with a 132% increase over last year. General Motors' new designs, aside from the bad month in full-size pickup sales, continue to drive sales higher as its Malibu and Impala posted sales gains of 33% and 10%, respectively.
While the December figures were mostly disappointing, looking at a longer time frame will help console some investors. Consider that sales in the fourth quarter increased 6% and December still was GM's highest-volume month since August. For the entire year General Motors delivered 7% more vehicles for a total of 2.8 million vehicles in the U.S. and its retail sales increased a healthy 11%.
Also, consider that GM became the first American auto company in history to top the J.D. Power Initial Quality Study with eight individual model awards -- five from its Chevrolet brand. Even with a worse-than-expected December, Cadillac managed to finish the year as the industry's fastest-growing full-line luxury brand.
Recently the U.S. treasury announced it had sold its last shares of General Motors and the company announced its CEO successor, Mary Barra. The once troubled automaker is trying to repair its brand image, improve its balance sheet, and is more profitable and competitive than it has been in over a decade.
The company is attempting to put its best foot forward in 2014 as it continues to refresh, replace, or redesign 90% of its vehicles by the end of 2016, which should help prevent lackluster sales performances seen last month. Also, investors shouldn't forget that GM has a cash hoard of roughly $27 billion dollars and could announce a dividend in the near future -- something that would definitely drive interest with investors once again.
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