In a report that gave just a hint of what's to come, General Motors (NYSE:GM) said that its U.S. sales fell 7% in the first quarter from a year ago, with "significant declines" in March due to the outbreak of the COVID-19 virus.
GM didn't break out its sales by month. But if it had, we would have seen a very sharp decline starting roughly in the middle of March. Here's what GM said about its first-quarter sales, and what it might tell us about how auto sales will go over the next few months.
Highs and lows of GM's first-quarter sales report
Given the severe disruption in auto sales caused by the coronavirus pandemic, the trends we see in GM's first-quarter numbers won't mean much in the near term. But I think they're important for GM investors (and auto investors generally) to note, as a snapshot of the state of the company's business before the pandemic -- and a possible preview of how things will go once the virus subsides and the country and economy start to recover.
So for the record, and for future reference, here are the high points of GM's first-quarter U.S. sales report:
- Sales of GM's new-last-year full-size pickups were up nicely from a year ago, when supplies of the new trucks were constrained. Sales of the Chevrolet Silverado and GMC Sierra 1500s rose a combined 31.9% to 152,766. Heavy-duty models of the Sierra also did well, up 42.5% to just over 13,000.
- Sales of the midsize Chevrolet Malibu sedan rose 3.2% to 35,283.
- Sales of the small Chevrolet Trax crossover rose 14.9% to 28,242.
- Sales of the electric Chevrolet Bolt totaled 5,873, up 36.1% from the first quarter of 2019.
And the low points:
- Buick sales fell 34.7%, with all models down year over year.
- Cadillac sales fell 15.8%, with all models down year over year.
- Chevrolet sales fell 3.8%.
- GMC sales fell 5.5%.
- Aside from the Trax, sales of nearly all of GM's bread-and-butter crossovers faded in the first quarter. The Chevy Equinox (down 17%), Chevy Traverse (down 12.1%), GMC Acadia (down 43.3%), Buick Encore and Enclave (down 42.1% and 30.4%, respectively), and Cadillac XT4 and XT5 (down 26.5% and 32%, respectively) have all been key components of GM's margin-boosting strategy over the past couple of years.
- GM's high-margin performance vehicles also fared poorly, with the Chevrolet Camaro and Corvette both down (40.5% and 3.1%, respectively) year over year.
What this tells us about the next few months
Simply put, it's grim. With North American production halted indefinitely and many dealers closed due to local stay-at-home orders, I doubt that GM is selling very many vehicles at all in the U.S. (or Canada) right now. To the extent that it is selling vehicles, they're probably trucks for commercial and government fleets -- good profitable business in normal times, but not enough to live on.
It's hard to tell how this mix of sales results will play out in GM's first-quarter earnings. At first glance, with the strong pickup sales, GM's mix and profitability was probably pretty good, at least until mid-March. But the big drop in crossover sales across the portfolio would be a worrisome sign, if these were normal times. We'll keep it in mind when things start to return to normal.
The raw numbers
|Brand||Q1 2020 U.S. sales||Change vs. Q1 2019|