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Despite Recalls, General Motors Company's Sales Are Rising

John Rosevear
June 3, 2014

Recalls? What recalls? Sales of the Chevrolet Corvette were up 268% in May, pacing another strong month for GM. Source: General Motors Co.

General Motors (NYSE: GM) said on Tuesday that its U.S. sales were up 13% in May, as a strong holiday weekend helped the General to its best monthly sales total since August of 2008.

GM's increase soundly beat analyst estimates, as the company continued to defy expectations that an ongoing recall scandal would impact sales of its latest products.

Strong retail sales suggest that the recall isn't hurting
GM's long-delayed recall of vehicles with defective ignition switches has led to a huge public outcry, a raft of lawsuits, a record fine -- and major changes within General Motors, as CEO Mary Barra has moved aggressively to fix long-standing problems within the company.

So far in 2014, GM has recalled over 15.8 million vehicles in North America, a huge number. Many analysts, including your humble Fool, have been concerned that the recalls and attendant publicity would have a negative impact on GM's ongoing sales.

But as was true a month ago, if the recalls are impacting GM's sales, the impact is hard to see. GM's retail sales rose 10% last month, outpacing rival Ford's (NYSE: F) 6% retail gain, as GM's new pickups and other recent models posted strong gains.

Another good month for GM's latest models, including the pickups
Sales of GM's new-for-2014 pickups, the Chevrolet Silverado and GMC Sierra, were up a combined 9.5% in May as GM continued to tweak its incentive offerings on the new trucks -- and as GM's dealers received larger supplies of new heavy-duty pickups, which went into production earlier this year.

The upscale GMC Sierra pickup continues to sell well. Sales rose 14% in May. Source: General Motors Co.

Several of GM's most recent models posted strong results. Sales of the well-regarded new Chevy Impala sedan continued to rise, up 23% -- and Corvette sales more than tripled. The new Cadillac CTS sedan rose 39%, and the Cadillac Escalade, also all-new, gained 30%. At Buick, sales of the small Encore SUV more than doubled, while the Regal sedan gained almost 50%.

Some older GM models also posted strong results: The compact Chevy Cruze was up 41%, the Traverse crossover gained 23.5%, and Camaro sales rose 30%.

That last one might seem like a surprise. Chevy's Camaro is an older model, widely expected to be replaced next year. But its key competitors, Ford's Mustang and Fiat Chrysler's (NASDAQOTH: FIATY) Dodge Challenger, are even older. An all-new Mustang and updated Challenger are both due later this year, and Ford and Dodge dealers are selling down the last of the old models right now.

Last year's Cadillac darlings struggled again in May
GM also saw a significant gain in fleet sales in May, up 21%. But the company cautioned that the gain was something of a fluke: GM said that the big gain was due to the timing of some deliveries, May was likely to stand as its highest-volume month for fleet sales in 2014, and GM's fleet sales are likely to fall sharply in June.

GM hopes that this attractive new coupe version of the Cadillac ATS will help revive flagging sales of the compact luxury model. Source: General Motors Co.</