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GM Fuel-Sippers Nab Buyers in April; Could Up Output Against Weakened Rivals

The auto maker could increase production in segments where it has low inventory, despite already running beyond capacity at key assembly plants, chief sales analyst Don Johnson says.

General Motors last month greeted new-vehicle shoppers seeking relief from soaring gasoline prices with its freshest and most-competitive lineup of fuel-efficient cars and trucks in years, triggering a bump in U.S. daily sales of 21.9%.

GM sold 232,538 cars and trucks in April, compared with 183,635 in like-2010, according to Ward’s data. There were 27 sales days last month and 26 year-ago.

The tally is 12.5% ahead of the auto maker’s sluggish performance in March, when it lost the monthly sales crown to cross-town rival Ford for the first time since August 1998.

In particular, the GM saw sales of fuel-sippers such as the Chevrolet Cruze compact car and Malibu midsize sedan rise sharply in April.

The Cruze accounted for 25,160 sales, its best performance since launching late last year and miles ahead of the car it replaced. GM estimates the new model helped double its share of the compact segment year-over-year. Malibu sales rose 44.4% over year-ago.

The red-hot Chevy Equinox and GMC Terrain small cross/utility vehicles continued to sizzle, with deliveries up 37.1% and 57.5%, Ward’s data shows.

“Consumers have, obviously, been purchasing smaller, more fuel-efficient vehicles,” Johnson says during a conference call with journalists and Wall Street analysts to discuss the April performance.

GM estimates compact cars moved to the No.1 segment during the month, ahead of midsize cars and small CUVs.

Further reflecting the growing mix shift to cars and away from the usually dominant trucks, sales of vehicles with 4-cyl. engines at GM rose to 39% of deliveries in April from 27% in like-2010.

GM vehicles with V-6 or V-8 engines each fell to 30% of sales from 36%.

Johnson expects GM will continue to take advantage of consumers’ changing preferences. “We’re feeling today, for the first time, the best-prepared ever for this shift,” he says.

The auto maker also anticipates more demand in the coming weeks from customers traditionally purchasing fuel-efficient offerings from Japanese brands.

For example, Honda said earlier this week Civic sales in 2011 will be constrained due to parts shortages caused by the March 11 earthquake in Japan. The Civic competes with the Cruze.

“Consumers who may intend to buy a vehicle from one of our competitors and find it not in stock may be an opportunity for us. There is an opportunity to again some share,” he says.

Johnson says GM could increase production in segments where inventories are low, despite already running beyond capacity at key assembly plants.

“We’re going to see what kind of increased demand may develop and where there are opportunities to increase our out to meet demand we will make those kinds of adjustments,” he says.

The auto maker finishes April with roughly 577,000 vehicles in stock – 192,000 cars, 275,000 trucks and 110,000 CUVs. The total is up slightly from March and 149,000 units from year-ago.

“At that level, we feel we are in pretty good shape heading into the summer months,” Johnson says.

GM also gets a boost in April from fleet sales, up 31% vs. like-2010, and its industry-leading incentives, according to third-party estimates, continue to attract customers.

Johnson says rental companies taking big seasonal deliveries and commercial buyers continuing to make purchases they delayed during the recession pushed up activity in the segment.

“This will probably be our peak,” he says of fleet sales, estimating deliveries to the segment will finish at about 26% of its total volume, or in line with year-to-date levels.

Johnson says the auto maker’s incentive spending fell in April by some $400 per unit compared with March and retail sales still managed to rise roughly 4%. GM will use discounting throughout the year to remain competitive and expects to levels to stay on par with the industry as a percentage of its average transaction prices, he says.

Johnson also reports GM continues to wrestle with a transition away from longtime car-hauler Allied Automotive, but saw no affect on sales in April due to a shortage of product on dealer lots.

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TAGS: Vehicles
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