General Motors (NYSE:GM) said its U.S. sales rose 1.6% in March, as a good retail gain was somewhat offset by lower deliveries to fleet customers.
GM's sales gain was modest, but it was good enough to outpace year-over-year declines at major rivals Ford Motor Company (NYSE:F) (down 7.2%), Fiat Chrysler Automobiles (NYSE:FCAU) (down 4.4%), Toyota Motor (NYSE:TM) (down 2.1%), and Honda (NYSE:HMC) (down 0.7%).
GM's sales: The raw numbers
|March||Total Sales||Change vs. March 2016||Retail Sales||Change vs. March 2016|
The good news for GM's profitability
There were several reasons for GM shareholders to be optimistic about March's results:
- GM said its average transaction price was about $34,000 in the first quarter, about the same as in the first quarter of 2016. (GM's results in its North America region were quite strong in the first quarter of last year.)
- Chevrolet's Trax, Equinox, and Traverse crossovers all posted very strong retail sales gains in March (up 51%, 26%, and 24%, respectively.)
- Despite weak industrywide sales for hybrids, retail sales of the Chevy Volt rose 15% last month. For the quarter, the Volt's retail sales were up 39%.
- Sales of GMC's crossover SUVs rose 47% as a group in March. Sales of GMC's Yukon XL, a highly profitable upscale sibling of the Chevrolet Suburban, rose 17%.
- High-profit Denali-trim models accounted for 29% of GMC's retail sales in March, the highest level ever.
- Buick sales rose 15% in March, paced by a 29% gain for the small Encore SUV.
- Retail sales of Cadillac's lone crossover SUV, the XT5, were 22% higher than year-ago sales of its predecessor, the SRX. Cadillac's average transaction prices were over $54,000 last month.
The less-good news: Pickups and Cadillacs down
There were some points of concern in GM's March U.S. sales report.
- GM's big pickups, an important profit center, got clobbered in March. Sales of the Chevy Silverado fell 11.6%, and its upscale GMC Sierra sibling was down 14.3%.
- GM's per-vehicle spending on incentives was about 13.5% of its average transaction price in March. Typically, anything over 10% is cause for concern. That percentage was down from February (14.9%), though.
- Sales of Chevy's mainstay Malibu and Impala sedans were both down sharply year over year: 35.5% and 22.5%, respectively.
- Aside from the XT5, which is new, sales of all of Cadillac's models fell year over year.
Chevrolet Bolt EV sales were steady
Sales of the battery-electric Chevrolet Bolt EV held steady, with 978 delivered in March. GM has delivered 3,092 Bolts in the U.S. so far this year, most in West Coast markets. The Bolt has just begun its nationwide rollout; its sales pace should increase over the next few months.
High inventories will come down, GM said
GM ended the month with 98 days' worth of vehicles in inventory. That's a high level: Generally, automakers aim for something in the 60- to 70-day range for cars and SUVs, with pickups somewhat higher.
GM said its inventories will fall to around 90 days' supply in the second quarter as lower production of cars will be somewhat offset by "strategic, launch-related growth" in supplies of trucks and crossover SUVs.
GM expects to end the year with overall inventory levels comparable to those at the end of 2016, but with fewer cars and more trucks and crossover SUVs.
What's next for GM: First-quarter earnings
GM will report its first-quarter results before the bell on Friday, April 28. The company has guided to incremental profit and sales gains in 2017, fueled by expected strong demand for several all-new crossover models.