NEWS ALERT
from The Wall Street Journal

Oct. 3, 2006
GM reported a 3.1% decline in September U.S. light vehicle sales, while Toyota sales surged. GM's tepid report comes as the auto maker's board held a monthly meeting at which it was expected to discuss the proposed GM-Nissan-Renault alliance. Earlier, Ford reported a 4.7% gain on strong demand for its cars following seven straight monthly declines, while Chrysler Group's sales fell 3.8%.

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Part of the full article reads as follows:
Sales of GM light trucks were flat, while cars sales slipped 6.4%. GM sold a total of 338,380 vehicles for the month. The Detroit company's sales are down 11% for the year at 3.2 million.

The No. 1 U.S. auto maker said retail truck sales, led by full-size pickups and sport utilities, improved on stronger sales of models like the Escalade.

GM, along with Ford and Chrysler, has been hammered this year by a slump in light-truck sales triggered by higher gasoline prices.
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I"m not sure how GM can say the light truck sales were flat and then turn around and say "retail truck sales" improved??? Apparently GM doesn't include vehicles like the Escalade SUV in "light truck sales" which is a bit surprising as light trucks generally include SUVs, Vans, and Min-Vans as well as pickups.

 

3.1% decline compared to what? Last month? Last year? If either, what factors were in play this month compared to the month it is being compared to? Was pricing better at the time? Stronger advertising? Or what?

I mean, if GM sees a decline, but it's because last month they had a bunch of great deals and this month their deals suck... what does that really tell you?

Year to date is probably a safer measurement of sales IMO as its harder to dramatically affect by short term fickle fluctuations in market.

 

Usually, unless otherwise noted, figures like these are the month just ended compared to the same month from the prior year which is the case here...these figures are for the month of September 2006 compared to September 2005.

As the article says, GM's sales are down a total of 11% for the entire year to date and that would be compared to their sales figures through the same month last year.

The figures for Nissan, Honda and Chrysler are not good either; Nissan is off 5.6%, Honda is off 4.1% and Chryselr is off 3.8%.

The only increases are Toyota which is up 25% and Ford whish is up a net of 4.7%; Ford's increase was in cars (headed by Mustang sales) while its truck sales were off 5.8%

 

Even comparing them to last year is different, as the employee thing ran just about all summer into October or November right?

 

I’m not sure what point you are trying to make?

There is a lot of dissecting that can and will be done to analyze all the nuisances of why one particular vehicle segment is down and another up and why one particular model configured in a certain way is selling well in Georgia, for example, but not selling at all in Mississippi, etc.

However, comparing the same month in the current year to the same month in the prior/a prior year is a fairly standard way to report sales results in the automotive industry. Identifying the reasons behind the changes in sales are what keep market analysts (both internal to the automakers and external) busy!

Here is one tidbit for my “Titan hating” friends, Titan sales rose in September.

 

I'm just saying that this year is quite different for GM to be compared simply because of the abundance of rebates (and the whole employee pricing deal) on 05-06 vehicles, while the rebates have been cut back quite a lot this year.
So a 3.1 decline for September might not represent accurately how well GM is actually doing.

 

I agree that you can't make grand predictions based on any one month and yes; part of any variance explanation includes things like rebates offered in one year not offered in another, etc.

That said, most of the nameplates are in decline in 2006 year to date and for most of them, that's coming off an already bad year in 2005 so I don't think this can be painted as good news for anybody (except Toyota).

 

GM's U.S. Divisions Deliver 338,380 Vehicles In September

# GM Retail Sales Up 1,385 Vehicles, Compared With Last Year, Led By Saab, Cadillac, Hummer, Buick and GM
# Segment Fuel Economy Leaders Chevrolet Silverado and Tahoe, GMC Sierra and Yukon Post Sales Increases
# 2007 Go To Market Strategy Driven By 23 Vehicles Offering 30 MPG And Backed By The Best Warranty Coverage In The Industry

DETROIT - General Motors' dealers in the United States sold 338,380 new cars and trucks in September. The company sold 1,385 more retail vehicles in September than the year before. Retail truck sales, led by full-size pickups and utilities, were up 2 percent. Retail car sales were down 12 percent, partly due to inventory constraints of Chevrolet Aveo, Cobalt and Malibu. Retail sales of 246,797 vehicles were down 3 percent on a sales day-adjusted basis.

"GM's truck business was boosted in September by our segment-leading fuel economy and the addition of the industry's best coverage, including the 5-year/100,000 mile warranty program," said Mark LaNeve, General Motors North America vice president, Vehicle Sales, Service and Marketing.

GM continues to reduce its reliance on low-margin daily rental sales. Sales to daily rental companies were down 26 percent compared to year-ago levels, while our commercial fleet business was up 12 percent. This ongoing planned pull-down of low-margin daily rental sales resulted in total September sales of 338,380 being down 6.8 percent compared with a year ago on a sales day-adjusted basis.

"Our retail business was solid in September and in line with expectations. Importantly, we continue to experience strong customer demand for our launch products and industry-leading lineup of fuel efficient vehicles. Having products like the Chevrolet Cobalt, Malibu and newly redesigned 2007 Aveo in such high demand in the market place is gratifying," LaNeve said. "We're on track to sell more than a million 2006 model year vehicles this year that achieve 30 mpg or better on the highway. We will go even further for the 2007 model year by increasing the number of fuel-sipping vehicle models in the '30 mpg or Over Club' by 9 vehicles, or more than 60 percent, to 23 models. More Americans every day are realizing we have a great story in fuel economy." (A list of the 2007 '30 mpg or Over Club' is shown further down in this document.)

"In addition to our great lineup of fuel efficient vehicles, we have launched the best warranty coverage of any full-line automaker with 5 years/100,000 mile powertrain, courtesy transportation and roadside assistance for each of our 2007 models," LaNeve added. "And, there is no deductible for the warranty, which is fully transferable."

Due to the success of new products, and recent support of the best warranty coverage of any full-line automaker, GM has seen sales over the last few months above the targets set in the North America Turnaround Plan. GM market share has improved in every quarter of 2006, and was at about 25 percent for the third quarter 2006. Calendar year-to-date, GM's retail selling rate remains above 3 million vehicles on an annualized basis and was 3.15 million in the third quarter.

Saab, Cadillac, Hummer, Buick and GMC all saw retail sales increases in September. Saab led the pack with retail sales up a powerful 45 percent, driven by 9-3 and 9-7X. Cadillac sales are up 22 percent retail, with strong showings by DTS, STS, SRX and the entire Escalade lineup. Hummer continued to show very positive results with H3 sales up 19 percent, helping the division sport an overall 10 percent retail hike. Buick retail sales are up 4 percent led by Lucerne, LaCrosse, Rainier and Terraza. GMC was up 3 percent retail, with sales increases of the Sierra, Yukon, and Yukon XL.

"Customers are recognizing GM's leadership position when it comes to products that offer outstanding value and fuel economy, whether that's a small car or a full-size pickup," LaNeve said.

"We just revealed our brand new 2007 Chevrolet Silverado and GMC Sierra full size pickups at the State Fair of Texas - two vehicles that lead their segment in estimated highway fuel economy and outstanding value." GM has announced carry-over pricing on the most popular versions of the all-new 2007 Chevrolet Silverado and GMC Sierra pickups.


Story:
http://www.gm.com/company/investor_i...on/sales_prod/

Sales and production numbers:
http://media.corporate-ir.net/media_...eries_1006.xls

Notes of interest:
-Escalade sales are up across the board
-H3 is still selling at a decent clip
-HHR moved over 10k units and is at 85k for the year
-Aveo sales were down, so were Cobalt sales
-With a strong 4q the Lucerne may move over 100k units, which probably nets GM some decent money
-Full sized truck sales were up for the month
-TrailBlazer sales are down big (which appears to be why truck sales were flat over-all)

My thoughts
-If GM is still managing to sell 51,000 full size trucks on the 800 platform (albeit with some good rebates to clear them out), the 900's are going to move quick
-GM either needs to kill the 360 platform or redesign the TrailBlazer. Is there still a market for a body-on-frame midsized SUV? I'm not sure, but we'll have to see how the cross overs are doing. I don't think I would update the 360.
-With the Enclave and Lucerne, Buick will start moving some products. If they can get a real LaCrosse then the division might not be in very bad shape (200k-250k units does not seem too out of reach)
-Cadillac could use that new CTS to keep the brand's momentium going
-GM's average to below average (Cobalt SS/SC excluded) small cars really need a pick-me-up. Lori, are you listening? A little styling goes a long way.
-Next year Saturn will have the Sky, Aura, Vue (new), and Outlook. They need an Ion badly to go with that lineup. The Relay needs to expire ASAP.
-Chevy needs new cars really really badly. The Impala is still selling, but there's nothing to get excited about. How long has it been since Chevy has had a solid car lineup?

 

Ah... but what I want to know is how much they made.

Sales dropped 3.1% over last year. But it takes far less money to make the new GMT900 than the truck they were making last year. There's also alot less GM employees since this year's buyout as well. Also less money losing incentives.

I'm keeping the powder dry till I see the finance sheet this quarter.