Recall Woes Didn't Dent General Motors Company's Sales

GM posts a solid gain for April on good sales of its pickups and newest cars.

May 1, 2014 at 7:30PM


Sales of the all-new 2014 GMC Sierra pickup rose 21% in April, GM said on Thursday. Photo credit: General Motors

General Motors (NYSE:GM) said on Thursday that its U.S. sales rose 7%  in April, beating estimates, as several new GM models posted strong sales gains.

GM's year-over-year sales increase beat analysts' estimates, which had called for gains in the 6%-6.5% range. It also beat old rival Ford (NYSE:F), which reported a slight sales decline on sluggish car sales.

GM had its share of sluggish-selling models in April. But it also had some big winners -- a strong suggestion that the company's ongoing recall woes aren't having much effect on sales of its latest much-improved models.

If the recalls are hurting GM's sales, it's hard to see
I said the other day that analysts would be watching GM's sales numbers carefully for signs that the publicity around its long-delayed recall of defective ignition switches was starting to impact its sales. But April's sales totals look like good news for GM: If those signs are there, they're hard to see.

Analysts at said in a statement that they've seen "very little -- if any -- impact" on what they call "consideration," the willingness of consumers to consider GM-brand vehicles as they research a purchase using Edmunds' online tools. 

And certainly, GM has quite a bit to smile about in April's sales totals. Sales of GM's new-for-2014 full-sized pickups, the Chevy Silverado and GMC Sierra, were up 9% and 21%, respectively. 

Did they do that with heavy incentives? If so, that's also hard to see. While GM has said that it raised incentives on its pickups in April, it said on Thursday that its overall incentive spending in April was down from that in March, while its average transaction prices are up for the year to date. analysts estimate that GM's average transaction price in April was $35,556, up 9.3% from a year ago, and up 4.6% from March. Among major automakers, only Volkswagen's (NASDAQOTH:VLKAY) -- which includes the Porsche and Audi brands -- was higher, they said. 

GM's newest cars continued to shine...
There's more to GM's story than pickups. Sales of the well-regarded new Chevy Impala full-size sedan were up 27%, while at the other end of Chevy's car spectrum, the tiny Spark saw sales rise 24%. Chevy Volt sales were up 19%.


The all-new 2014 Cadillac CTS sedan is Motor Trend's most recent "Car of the Year". Sales have been very strong in recent months. Photo credit: General Motors

Cadillac CTS sales were up 36%, a number driven by the all-new CTS sedan's 68% increase. (The CTS coupe and wagon are carryover models; the sedan is all-new for 2014.)  Total Cadillac sales were up 5% in April. 

Buick sales rose 12%, as the small Encore crossover jumped 48% and the Regal sedan gained 21%. Small crossovers have been especially strong lately; GM recently announced that the Encore's sibling, the Chevrolet Trax, will join the U.S. lineup early next year. 

...while some of GM's mainstream car models struggled
Bad news? There was some. Sales of Chevrolet's mainstay sedans, the compact Cruze and midsize Malibu, were both down, as was the subcompact Sonic. All saw retail declines similar to what we saw at Ford. Ford attributed those declines largely to a shift in buyer preferences away from cars, and toward crossovers and SUVs.

That may also have been true at GM. But competitive pressures aren't helping: Toyota's (NYSE:TM) all-new Corolla, the Cruze's biggest competitor, saw sales rise 20%, while Nissan's (NASDAQOTH:NSANY) hot-selling Altima, a Malibu rival, was up almost 14%.

The upshot: business as usual?
As I said earlier, if GM's sales are suffering as a result of the harsh publicity around its recalls, it's hard to see. As we've seen all year, well-regarded new GM models, like the Impala and the CTS sedan, continue to post outsized gains, while GM's all-new pickups are continuing to gain traction. 

GM would love to put the recall mess behind it, but the legal ramifications are likely to drag out for some time. Still, if the company can continue to move ahead with its product plan, GM's profits -- and its share price -- should improve over time.

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