General Motors Tops Detroit Rivals in October
General Motors kicked off the beginning of its fourth quarter with a solid October sales month, up 16% to 226,402 vehicle deliveries. While automakers admitted the month started slower, due to the government shutdown, in the end it didn't matter.
"GM's sales results are the best evidence yet that the government shutdown had minimal impact on auto sales in October," said Michelle Krebs, senior analyst at Edmunds.com. "Its 15 percent increase-led by strong performances by the new Chevy Silverado and GMC Sierra-surprised just about everyone. And GM's small cars like Chevy Sonic and Chevy Spark continue to stand tall."
Let's dig into the numbers and what we can expect from General Motors.
Quick hits by brand
- Buick sales increased 31% with retail sales up 25% -- the 18th consecutive month of year-over-year growth.
- GMC was up 16% led by the Terrain, which posted its best October sales ever, and the Sierra which was up 13.3%.
- Chevrolet was up 15% and had 13 nameplates post double-digit-sales increases, including every single SUV and crossover, as well as its most profitable Silverado pickup.
- Cadillac sales have grown in each of the last 13 months and were up 10% in October. Sales success was driven by the ATS and all-new XTS models.
One of the biggest developments to watch as we near the end of 2013 is sales of General Motors' most profitable vehicles, the Silverado and Sierra full-size pickups. Consumer Reports named the Chevrolet Silverado "Best Truck" recently, though it might be short lived as Ford's next generation F-Series is set to debut next year.
"We are particularly pleased with our truck momentum. Chevrolet and GMC have the newest and best light duty trucks, sales are accelerating and we are gearing up for the second, third and fourth phases of our strategic truck plan," said Kurt McNeil, vice president, U.S. sales operations.
Sales of General Motors' redesigned 2014 Silverado and Sierra increased 62% from the prior month and accounted for nearly 76% of its light-duty deliveries, according to General Motors. With the Silverado and Sierra redesigned, it has enabled General Motors to earn 30% share of light-duty pickups that are priced at $40,000 or higher -- a 5% improvement versus last year.
Historically, Detroit automakers have gone as their full-size pickups go; trucks drive the majority of the profits at Ford and General Motors. Higher prices and sales bode well for investors who hope that General Motors can keep its North America margins near the 9.3% mark reported in the third quarter. That would be a huge win for General Motors; it has lagged behind rival Ford, which consistently produces margins above 10%.
If General Motors is going to see further sales increases on its full-size pickups it needs to fix its axle supply constraint which has slowed deliveries of regular and double-cab models of the Silverado. Those two models are expected to account for about 40% of General Motors' pickup volume, and if dealers can't get the stock needed, retail sales could drop in November -- although management says it will be able to offset the issue with extra production, soon.
Sales look to continue to improve for the folks at General Motors as new products continue to roll out. This month the high-end trim of the Silverado, High Country, and GMC Sierra Denali will hit showrooms.
After that, all-new Chevrolet, GMC, and Cadillac full-size SUVs will hit the showrooms starting in the first quarter of 2014. General Motors is also returning to the mid-size pickup segment after its absence and fresh redesigns of its Chevrolet Colorado and GMC Canyon will be delivered later in 2014.
This is all part of General Motors' strategy to refresh, redesign, or replace 90% of its vehicle lineup by 2016; this is something that will improve sales figures and revenues for investors over the next couple of years.
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The article General Motors Tops Detroit Rivals in October originally appeared on Fool.com.Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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