General Motors Sales Surge 46% on Strong Consumer Demand
For the month, the Detroit-based automaker reported Tuesday that compared to February 2010, sales rose 46% for a total 207,028, exceeding analyst estimates -- and even GM's own expectations. The increase was driven largely by a 70% jump in retail, or individual consumer, sales.
Among its four core brands -- Chevrolet, Buick, Cadillac and GMC -- the company reported a 49% sales gain.
"We had another outstanding month, continuing the momentum that began back in the fourth quarter of 2010," said Don Johnson, vice president of U.S. sales, in a conference call with investors and the media following release of the monthly sales figures.
Johnson said an improving economy helped spur demand among consumers who are showing increasing confidence in the nation's recovery, despite lingering challenges.
GM's total sales so far this year have risen 36%, while retail sales have increased by 52%, the company said in a statement, accompanying the sales results. Retail sales of GM's cars, trucks and crossovers all rose at least 59%, GM said.
Among its brands, GM reported that sales at Chevrolet, by far GM's largest division, rose 43% compared to last year to nearly 143,000 units. Strong demand for the Cruze compact sedan rose 212% year-over-year compared to the model it replaced, the Cobalt. Sales of Silverado pickups and Equinox compact SUV models were also strong.
Buick reported sales of 15,807 vehicles in February, a 73% increase from a year ago. With the increase, Johnson said the division is on track to outsell Toyota Motor's (TM) luxury Lexus unit for the second month in row.
GM's luxury brand, Cadillac, sold 15,768 units, a 70% gain, attributable to a 159% rise in sales of CTS coupes and sedans. With 6,033 units sold, the CTS alone likely outsold Ford Motor's (F) entire Lincoln division, Johnson said.
Crossovers Take Off
GMC, which sells trucks and SUVs, saw sales rise 59% to 32,534 during the month. GMC, along with other GM brands, benefited from continued strong demand for crossover vehicles, which combine the utility of a traditional SUV with more car-like handling and ride.
Sales of GM crossovers in February were the best ever for the company, rising 57% compared to a year ago. Many of GM's most popular crossovers set sales records for the month. The Chevrolet Equinox, for example, recorded a 98% sales increase while those of the slightly larger Chevy Traverse rose 32%.
The company's stellar results weren't merely the result of increased incentive spending, Johnson said during the conference call. "Price and incentives alone don't explain a 70% increase retail increase and a gain of almost three full share points," he said.
Johnson said the company has an average 60-day supply of vehicles on dealer lots, and is actively managing its inventory, a process that maintains healthy levels and anticipates demand.
Further, he said, the recent purchase of its own finance arm, GM Financial, has allowed the company to raise the number of sales to leasing customers and those with less-than-perfect credit.
GM was the first of the major automakers to announce its February U.S. sales figures. Others, including Ford and Toyota, will release their sales data later in the day.