General Motors (NYSE:GM) has been the subject of a lot of tough news stories lately. But here's a bright spot: GM's U.S. retail sales were up 7% in March.
GM's overall sales were up 4%, as a planned reduction in sales to rental companies dented GM's fleet sales totals. But GM said on Tuesday that it had gained retail market share, and several of its key product lines posted strong results.
A stronger than expected month for GM's pickups
GM's new pickups, the 2014 Chevy Silverado and GMC Sierra, have sparked a lot of discussion among analysts. On the one hand, the new trucks are strong contenders in the category. But GM's insistence on keeping incentives low has cost the company sales, particularly at the lower end of the market.
Chrysler has been seen as the key beneficiary of GM's stinginess, and sales of Chrysler's Ram pickups surged 26% in March thanks in part to aggressive discounting. But GM held its own. With a big incentives-and-marketing push behind Chevy trucks, sales of the Silverado rose 14% in March -- and sales of the (generally higher-priced) Sierra rose 23%.
So, did GM simply jack up its discounts? They did, but they appear to have done it carefully: GM said on Tuesday that its average transaction prices were up over $3,800 from a year ago, and that their per-vehicle incentives averaged 10% of average transaction prices, below the industry average 10.3% according to J.D. Power.
We watch the pickup market closely because no products are more important to the Detroit automakers' earnings. Pickups sell in huge volumes and generate significant profits; while GM is not quite as dependent as rival Ford (NYSE:F) on the health of the U.S. pickup market, the Silverado and Sierra are still arguably the company's most important products.
in contrast to some rivals, GM's cars sold well, too
But GM had more than pickups going for it in March. Despite a crush of tough publicity stemming from GM's ongoing recall issues -- and despite subdued car sales at some of GM's key rivals -- GM's car sales were solid. Overall sales of Chevrolet cars were up 10%, with the subcompact Sonic (20% sales increase) and the big Impala (103% increase) especially strong.
Several of GM's premium cars also did well. The Buick Regal posted a 52% increase, and the much-acclaimed Cadillac CTS saw sales rise 11%.
As we saw with both Chrysler and Toyota (NYSE:TM), SUV sales have been especially strong lately. GM didn't miss out: The Cadillac SRX crossover posted a 37% sales gain. Sales of GM's big SUVs -- the Chevy Tahoe and Suburban, and their upscale cousins -- were up 62%. GM is in the process of rolling out all-new versions of the big SUVs, and selling off the last of the old models.
So, does a good month for sales mean everything is OK at GM?
It means that GM's recall woes appear not to have done much harm to its sales last month. I'm not sure it means anything more than that -- at least not yet.
None of GM's current vehicles are affected by the ignition-switch defect that is blamed for 13 deaths. I think many people understand that the problems with those switches happened before GM's bankruptcy and restructuring, when it was a substantially different company.
CEO Mary Barra's response to the crisis -- offering apologies and promising a transparent investigation -- has so far been on point. As long as that continues, I think GM will be able to escape lasting damage.
But just a few months ago, when Barra first took over as CEO, GM was a company on the rise. Its products and prospects and finances were all improving. The U.S. government had sold the last of its stock, and it had the industry's first female CEO. GM's prospects seemed to be brightening because its story at that moment was a good one.
The story right now is different. As long as that continues, it's going to be hard for GM to draw attention to the good things. If it continues for more than a few months, GM's sales seem likely to suffer. Stay tuned.