General Motors, coming off a strong April performance, sees potential to raise its 2013 U.S. industry sales forecast, but the fiscal crisis in Washington currently stands in the auto maker’s way.
“There may be upside to our annual forecast, but we’ll have to wait and see over the next couple of months,” Kurt McNeil, GM’s chief sales analyst, says in a conference call today with journalists and Wall Street analysts to discuss its April results.
GM’s light-vehicle deliveries rose 6.9% on a daily basis to 237,646 units from 213,387 year-ago. Last month included 25 selling days, compared with 24 in like 2012.
The auto maker also saw its U.S. market share bump to 18% after dipping below that mark in February.
A slew of positive broad economic indicators underpin GM’s possible change to its forecast of 15.0 million to 15.5 million industry sales this year.
McNeil points to greater availability of consumer credit and reasonable interest rates, a stabilizing job market, moderate fuel prices and rising personal income and household wealth.
“Every economic pillar of light-vehicle sales is strong enough to keep the (monthly selling rate) in the 15.0 (million) to15.5 million-unit range for the entire year,” he says.
However, the fiscal crisis in Washington remains a wild card. With lawmakers unable to reach an agreement on the budget deficit earlier this year, the Obama Admin. recently began slashing government spending, and it is unclear how the cuts will affect average Americans.
“There’s just so much noise coming out of Washington in the fiscal mess that I’m a little reluctant to raise the forecast,” says GM Chief Economist Mustafa Mohatarem. “But the fundamentals underpinning vehicle sales are very, very strong.”
GM saw consumers flock to cars, trucks and cross/utility vehicles from each of its four divisions in what the auto maker called its best April in five years. Chevrolet’s deliveries rose 6.5% to 172,460 units; Cadillac jumped 28.9% to 13,230; Buick saw a 6.6% uptick to 17,157; and GMC inched up 2.5% to 34,799.
All four divisions are solidly in the black sales-wise so far this year, with Cadillac particularly strong, up 37.1% to 13,230 units in the first four months. The newly launched ATS compact sports sedan delivered 2,725 units in April, and the 9-month-old XTS fullsize sedan sold 2,891.
Buick deliveries climbed 22.7% to 64,777 units through the first four months. April standouts included the new-for-’13 Encore small CUV with sales of 2,916 units and the Verano small sedan, up 8.9% to 2,916.
McNeil says Buick found traction last month in historically weak coastal regions, with deliveries for the rebuilt brand surging 40%-50% in the key metropolitan markets of San Francisco, Miami and New York.
“We wouldn’t be surprised to see similar results on the coast materialize as Cadillac gains more traction with the ATS and brings the (redesigned) CTS to market in the fall,” he says. “Both of these cars are in segments that are more popular on the coasts.”
Chevrolet sales so far this year are ahead 6.4% to 642,164 units. The Silverado large pickup, which will include a redesigned-for-’14 model in the coming weeks, jumped 23.0% in April to 39,395. The Cruze small car gained 16.2% to 22,032 and the Equinox 5-passenger CUV grew 10.1% to 20,965.
Chevrolet sales chief Don Johnson says the auto maker sold “a few hundred” of the redesigned-for-’14 Chevrolet Impalas last month. Shipments of the large car began three weeks ago. GM wants sales of the sedan to flip to 70% retail from 70% fleet.
“We’ve got extremely excited dealers and extremely excited consumers,” he says.
Sales of the GMC Sierra large pickup in April increased 8.3% to 14,208 units, pushing the brand’s year-to-date results up 12.2% to 139,726. McNeil says the auto maker’s inventory plans on the truck side of the business remain on track ahead of the redesigned Silverado and Sierra.
GM’s large-pickup stock fell to 228,524 units between March and April to a 103 days’ supply from 239,718 and 117 days’. Inventory of between 100 and 120 days is typically seen as healthy, given the numerous body styles available in the segment.
