General Motors (NYSE:GM) continues to score big sales gains with its trucks and SUVs.
GM said on Monday that its U.S. sales rose 6%, its best July result since 2007, thanks -- once again -- to strong sales of pickups and SUVs.
Both pickup trucks and SUVs tend to be more profitable than similarly sized car models, and many automakers have benefited as low gas prices and demographic trends have boosted sales of trucks over cars.
But few have been as well-positioned to benefit as General Motors -- and GM continued to make the most of the trends in July.
Making the most of a big boom in pickup sales
Ford's new F-150 may be stealing the bulk of the headlines these days -- but it's GM's full-size Chevrolet Silverado and GMC Sierra that are stealing big sales from the Blue Oval.
Tight supplies of the new F-150 have limited Ford's ability to make gains in a booming market. But GM faces no such restriction with its trucks, which were all new for 2014 and remain strongly competitive.
Sales of the Silverado rose 34% in July, and the Sierra was up another 13%. Sales of the two combined are up 16% this year through July -- and they lead Ford's F-Series by over 29,000 units.
A lot of that gain has come from a jump in GM's commercial fleet sales. Investors are rightly wary of low-margin rental-fleet sales, but sales of trucks to contractors, mining companies, and other commercial-fleet operators is good business. Both Ford and GM compete hard for it -- but with Ford prioritizing retail sales of its new trucks, GM has been able to make big gains in 2015. GM's commercial-fleet sales have risen 17% this year.
GM's big SUVs are also all-new and selling quickly
There's more to this story than just full-size pickups, though. GM's new-for-2015 midsize pickups, the Chevy Colorado and GMC Canyon, continue to sell nearly as fast as GM can make them. When they're factored in, GM's overall sales of pickup trucks are up 51% in 2015.
Also huge: SUVs. GM's biggest SUVs (the Chevy Tahoe and Suburban and their upscale GMC and Cadillac siblings) are also all-new for 2015, and the Texas factory that builds them is struggling to keep up with demand. Meanwhile, the big Chevy Traverse crossover and GMC's Acadia SUV both posted 32% gains in July -- while the not-so-big Buick Encore put up a 68% sales increase. The compact Encore is up almost 35% so far in 2015.
This isn't about discounts: GM's prices remain strong
Sales of many of GM's car models, including the core Chevy Malibu and Impala, are down for the year to date. But that hasn't hurt GM's bottom line, as those strong truck sales have meant strong profits for GM.
GM's profit margin in North America was an impressive 10.5% in the second quarter, thanks to all those truck sales -- and specifically, thanks to strong average transaction prices as GM remained disciplined around "incentives," or discounts.
The General's average transaction prices continued to be strong in July, at $33,800. That's up about $530 from July of last year, GM said -- and average transaction prices on its full-size pickups were up over $1,000 from a year ago.
Full-size pickup prices were also up $230 from GM's very strong result in June. That suggests that while Ford may be finally ramping up supplies of its new F-150, GM hasn't felt the need to cut prices to compete with its newest rival.
And that, in turn, bodes well for GM's bottom line as we move through the third quarter.