agent Entrepreneur logo
MenuMENU
SearchSEARCH

GM Sales Appear Resilient Amid Recalls, Dealers Optimistic

May 27, 2014
4 min to read


Via Reuters:


In the midst of an historic run of recalls, including over one defect linked to at least 13 deaths, General Motors Co sales are showing resilience.

Ad Loading...


The No. 1 U.S. automaker is beating the industry average this month, according to one estimate, and more than 10 dealers interviewed by Reuters were upbeat, saying lingering concerns about the safety of the company's current new car lineup are dissipating even as the number of recalls rise.


While dealers report some wariness from owners of GM cars, they say GM's mounting recalls - the 15.8 million vehicles globally recalled in 2014 is more than last year's total U.S. new car sales by all manufacturers -- are not stoking fears.


Nearly two months ago, after her Texas dealership had missed its own March sales target, Ancira Motor Company Vice President April Ancira told Reuters that it would take time for GM to gain back lost customers and that Chevrolet was "suffering". This week, she said that dealership traffic had rebounded from a dip and customer worries have waned. Once-frequent concerned customer calls have declined to a call or two a week.


"There are still a few customers concerned about safety, but GM has really stepped up to the plate," she said, citing free rental cars for customers waiting for repairs to Chevrolet Cobalts and other models with defective ignition switches, the highest profile recall linked to 13 deaths. GM's U.S. recalls, 29 this year, show its concern with safety, she said.


Investors have been less relaxed. GM stock is down almost 20 percent this year and the company has announced $1.7 billion in recall-related charges in the first two quarters.

Ad Loading...


In its latest announcements this week, GM recalled 2.6 million vehicles due to possible faulty seat belts, transmissions, air bags and fire issues, and another 284,000 to address a potential fire hazard.


In previous surveys by Reuters, dealers reported a barrage of customer calls with questions about the safety of their cars, especially the 2.6 million vehicles, including Saturn Ions and Cobalts, recalled for the ignition switch defect linked to the deaths.


But all four of GM's U.S. brands reported April sales increases, and according to LMC Automotive research, GM's retail sales through May 18 were up 3.5 percent compared with the same period a year ago, higher than the industry average of 0.5 percent.


Buckingham Research Group this week recommended buying GM stock aggressively, saying in a note to clients that thus far "there has been no measurable impact in the marketplace, and we believe that will continue."


A weekly analysis of customer "consideration" for GM brands by industry researcher Edmunds.com shows no significant impact of the recall so far.

Ad Loading...


George Hoffer, a University of Richmond transportation economist, said that as the ignition switch recall involves some older vehicles and defunct brands, its impact has been muted. He added that constant media coverage of recalls has "inoculated" consumers against them.


Toyota's recall of more than 9 million vehicles in 2009 and 2010, partly related to unintended acceleration, led to a dip in sales and resale prices for the brand, said Larry Dominique, executive vice president at industry researcher TrueCar.com. But it dissipated when negative headlines about the recalls faded, he argued.


Toyota's share of the U.S. market has still not returned to its 2009 peak, although the company has had to deal with issues beyond its own cars, including improved quality from its competitors and the aftermath of the 2011 Japanese tsunami.


During GM's April 24 quarterly earnings call Chief Executive Mary Barra was asked by an analyst whether increased traffic in dealerships related to the recalls could lead to new sales.


Apart from stressing concern over the ignition switch issue, Barra said GM was focusing on customer service through the recall process and offering employee pricing to car owners.

Ad Loading...


"We see that as a huge opportunity," she said of the increased traffic to dealerships.


Matt Jones, a senior editor at Edmunds.com who focuses on dealerships, said that the opportunity for new car sales during the recall process is not that high.


"When people come in for a recall they're not in the buying stage, they're in the fix-it stage," he said.


But several dealers said they had sold a small number of cars to recall customers and appeared to take the attitude that any customer on the lot was a sales opportunity.


"The key is to make this as pleasant and smooth an experience as possible so that when these car owners are ready to buy, they'll think of us," said Andy Sweis, general manager at Jennings Chevrolet in Glenview, Illinois, who said his dealership had seen "a few" sales to recall customers.

Ad Loading...


Al Cerrone of Cerrone Chevrolet Buick & GMC Truck dealership in South Attleboro, Massachusetts said some customers are trading in recalled cars for new Buicks.


Now a consultant at the dealership he recently sold, Cerrone said customers are aware of the recalls but don't disparage GM.


"The silver lining is pent-up demand," he said. "They've held out for a long time because of the economy or whatever, but now it's time for them to buy."

More Industry

Photo of two men in suit jackets shaking hands next to new car inside of a dealership
IndustryApril 23, 2026

A New Consumer Culture in the Auto Dealership

Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.

Read More →
Closeup of the side of an Audi car
Industryby Hannah MitchellApril 23, 2026

New-Vehicle Sales Down

A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.

Read More →
Photo of Cadillac Lyriq SUV on road with partly cloudy sky in background
Industryby Hannah MitchellApril 16, 2026

Used Autos Selling for More

A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.

Read More →
Ad Loading...
Photo of facade of Waldorf Toyota car dealership
Industryby Hannah MitchellApril 16, 2026

Maryland Auto Group Sells

A group out West picked up the major D.C.-area collection, putting it in the upper tiers of private automotive groups in the U.S.

Read More →
Line graphic showing Cox Automotive's March Credit Availability Index status
Industryby Hannah MitchellApril 13, 2026

Auto Lending Opens Up in March

Lenders loosened access for subprime borrowers, and consumers with negative equity reached a record high, Cox Automotive reported.

Read More →
electric vehicle next to an urban charging station. EV Demand Diverges. F&I and Showroom logo
Industryby Lauren LawrenceApril 10, 2026

EV Interest Varies Regionally

U.S. consumer interest in electric vehicles lags behind other countries despite the rising gas prices caused by the ongoing war in the Middle East.

Read More →
Ad Loading...
Photo of the rear of a Mercedes GLC 400 electric SUV with a skyline in the background
Industryby Hannah MitchellApril 10, 2026

Brands Weighed on Projected Recalls

Research reveals the brands and models most likely to have higher recall rates over their lifetimes. While some brands rank high, addressing safety issues can be a selling point.

Read More →
Photo of white 2026 Ford Bronco on a sandy beach
Industryby Hannah MitchellApril 10, 2026

March New-Vehicle Sales Don’t Reflect War

Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.

Read More →
Photo of several cars on lifts in a service center
Industryby Hannah MitchellApril 9, 2026

Franchised Dealers Stand to Gain Service Business

Cox Automotive research shows both the opportunities and the challenges in turning consumers’ growing affordability needs into increased fixed-operations revenue.

Read More →
Ad Loading...
Photo of office desk with open laptop on it and an empty chair next to it
IndustryApril 9, 2026

What Matters Most in Building Your Agency

The partner you choose for growth and expansion is key, because better is the ultimate goal instead of growth for growth’s sake.

Read More →