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General Motors' Sales Move Higher, But Lag Behind Competition

By Daniel Miller - Oct 4, 2015 at 11:00AM

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Here's a look at some highlights in GM's September sales data.

Image source: General Motors

September ended up being a very strong month for the automotive industry in the U.S. market. Along with Labor Day holiday sales being counted in September rather than in August as they were last year, most automakers followed the holiday with continued sales strength for the remainder of the month. Here's a glance at General Motors' ( GM 3.20% ) sales results, how they compare to those of competitors, and the highlights from the data.

Let's dig in
General Motors delivered more than 251,000 units in the U.S. last month which was a 12.5% increase from the prior year. The bulk of that increase was led by GM's Chevrolet and GMC brands, which posted respective sales gains of 10.9% and 23.8%.

However, despite GM's 17.3% increase in retail sales, GM's total sales increase of 12.5% lagged other major competitors. Ford posted a total sales gain of 23.3%, while Fiat Chrysler Automobiles, Toyota, and Honda posted respective gains of 13.2%, 16.2% and 13.1%.

Of course, when discussing September's sales results, GM took a slight jab at the competition.

"Staying focused on core values like initial quality, sales and service satisfaction, cost of ownership, dependability and advanced technology is paying off in higher sales and share, stronger transaction prices and lower incentives," said Kurt McNeil, GM's U.S. vice president of Sales Operations, in a press release. "Unlike our competitors, we did not need to rely on higher incentives to grow our business." (Emphasis added)

While that last part might be true, investors should note that GM's incentive spending was 11.2% of average transaction prices, which is equal to the industry average.

Looking specifically at GM's full-size truck highlights -- the Chevrolet Silverado and GMC Sierra -- average transaction prices were up more than $800 per unit month over month, and nearly $3,200 year over year, according to GM. Further, GM's average incentives were down $400 per full-size truck month over month and nearly $800 year over year.

Those statistics definitely bode well for the profitability of GM's bread-and-butter full size trucks. For additional context, sales of the Silverado and Sierra were up 7.1% and 17.8% respectively last month compared to the prior year, as opposed to Ford's F-Series, which was up more than 16%, and FCA's Ram Truck, which posted no gain compared to last year.

Beyond GM's full-size trucks, here's some additional fleet and commercial information for investors to digest.

Through the first nine months of 2015, GM's commercial deliveries and government sales -- the more favorable of the fleet sales -- were up 15% and 4%, respectively, while rental deliveries are down 14%. What will be interesting to see in the fourth quarter is how GM's commercial deliveries hold up. Ford is finally getting enough inventory of the 2015 F-150 to its dealerships to begin filling more fleet and commercial orders for the truck. That could pressure GM's healthier fleet sales in the fourth quarter.

Despite GM posting a total sales gain of 12.5%, the automaker did slightly lag competitors. That said, in the grand scheme of things, the U.S. is still adding jobs, fuel prices remain low, and interest rates remain cheap, which suggests GM will continue to post solid sales gains in larger SUV and truck segments -- which will fuel impressive quarterly results through the remainder of 2015. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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