GM Sales Propelled 11 Percent Higher by Pickups, Small Cars
General Motors today reported that its June sales grew 11 percent thanks in part to a recovery in demand for its full-sized pickups.
Sales of the Chevrolet Silverado and GMC Sierra pickups, which fell in May and were flat in April, snapped back with a 15 percent gain in June. Car sales stayed hot, rising 28 percent, reported Automotive News.
Don Johnson, GM's vice president of U.S. sales, said the rebound in pickup sales tracked a gradual drop in gasoline prices throughout the month.
"As people got over the fear of a fuel-price spike, those who actually need a pickup have come back into the market," Johnson said during a conference call on Thursday.
As long as gasoline prices don't spike "dramatically," he expects pickup sales to strengthen in the second half of the year, which traditionally is better than the first half for pickup demand.
Still, Johnson confirmed that GM plans to trim its pickup production by idling plants this month, after inventory swelled amid gasoline-price spikes in the spring. He said pickup inventory is "slightly above where we'd like to be," at 122 days' supply. GM's target range is 100 to 110 days, he said.
Despite the decline in gasoline prices, customers still favored fuel efficiency. Chevrolet sold 24,896 Cruze compacts in June, the third straight month the model topped 20,000 units. The Cruze Eco, the most fuel-efficient version with a 42 mpg highway rating, accounted for 17 percent of the model's sales, up from 15 percent in previous months.
Truck brand GMC led GM's four divisions with a 15 percent sales gain from a year earlier, followed by Buick, up 13 percent and Chevy, up 11 percent. Cadillac sales were down 8 percent, which GM blamed on a planned reduction in sales to rental fleets.
Some of GM's sales momentum comes from luring buyers from non-GM brands. Its conquest rate, the portion of buyers not trading in a GM vehicle, was 47 percent in June, up from 40 percent in January.
Johnson attributed the improvement to hits such as the Cruze, which had 55 percent of its buyers come from non-GM brands in June, in addition to buyers of Japanese cars who might have had trouble finding what they wanted due to inventory shortages related to the March 11 earthquake in Japan.
"It's a combination of lower inventory from some of our competitors as well as quite frankly because of the new product that we have in the marketplace," he said.
GM's crossover sales fell 2 percent because of a reduction in sales to fleet buyers. Retail crossover sales rose 24 percent, led by the Chevy Equinox, up 79 percent from June 2010, and the GMC Terrain, up 75 percent.
Overall in June, GM's fleet shipments dropped 1 percent, while retail sales rose 16 percent.
After loading on discounts and lease deals to start the year, GM continued a trend of modest incentive spending. In June, its incentives fell about 6 percent from May. Johnson said they stood right around the industry average, which he said was 8.3 percent of the average transaction price in June.
When asked how GM would respond if Japanese rivals Honda Motor Co. and Toyota Motor Corp. ramp up incentives in the second half of the year, Johnson said GM will stick to its goal to be in line with the industry.
"We're going to wait and see what industry does," he said. "But at the end of day, we're going to maintain our competitive position."
More Industry

Penske Auto Group Deal a Record
The deal to take the dealership and transportation services company private sets a new pace for industry buy-sell transactions.
Read More →
War Toll a Damper on Used Auto Prices
Cox Automotive found wholesale depreciation to be elevated in September amid high fuel prices and this year's unusual hurricane season.
Read More →
Bridge the Maintenance Gap
With many drivers missing recommended maintenance, service departments offering transparency and efficiency have a better chance of reaching financially strained consumers.
Read More →
California Store Has New Owner
The longtime dealership in the northern part of the state is known for robust fleet sales and has served the state capital for 115 years.
Read More →
BMW Plant Pursues Cleaner Energy
BMW Group Plant Leipzig has utilized hydrogen to help power its production since 2013, but a new pipeline is planned to take it to another level.
Read More →
Auto Affordability Inches Up
The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.
Read More →
Ohio Auto Group Under New Ownership
After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.
Read More →
RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →