GM's May sales numbers were down 30 percent from last May. A disastrous 39 percent dive in truck sales led to so much spin in this month's press release that reading it was like watching a washing machine in full boogie mode. GM blames the sales drop on a number of factors: a "strong May 2007," "a decline in fleet deliveries," the "impact of the American Axle strike" and Hillary Clinton's dismal showing in the polls. OK, I made that last one up. The bright points: the new for '08 Malibu's total sales rose 34 percent (103 percent increase in retail units) and the CTS' total sales climbing by 11 percent (retail sales up 18 percent). The Aveo was up 39 percent total and 22 percent retail, Cobalt was up 15 percent total (but only one percent retail) and Vibe was up 65 percent total with a 36 percent increase in retail sales (so much for declining fleet sales!). Rick Wagoner promises to shift focus from trucks to passenger cars, with cars accounting for 60 percent of their North American production in three years. Judging from May's figures he may want to step up the schedule on that.
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Too bad GM doesn’t report earnings every month. They may have had record Aveo and Cobalt sales, but I bet they lost money on every one.
They were putting $2,000 on the hood of cobalts here for their memorial day sale (which seems to still be going on BTW) – thought that seemed like a lot of money for an already cheap car, and isn’t everyone flocking to small cars already?
Wow. I can’t even imagine how the stats would look like without the Aveo, Malibu, Cobalt and Vibe! What a disaster!
Here are the top 5 sellers on the numbers I’ve seen.
1. Civic-53.3k
2. Corolla-52.8k
3. Camry-51k
4. Accord-44k (autoblog missed that one)
5. F-150- 43K
Every GM below that.
Ouch!
Bunter
PS-Frank, and they may get a chance to pretend June and July have “improved” as those months were aweful last year.
Walkonwater Wagoner promises many things. And deliver on few of them. After seeing CR’s July issue, Detroit is in worse shape than I thought when it comes to smaller fuel efficient vehicles. And GM’s battery problems only make their future look even bleaker.
As CR pointed out this month, both the Cobalt and the Aveo have surprisingly bad gas mileage for such small, cheap, cars (and suck quite hard in many other ways as well). Not surprising they still require heavy incentives.
“They were putting $2,000 on the hood of cobalts here for their memorial day sale (which seems to still be going on BTW) – thought that seemed like a lot of money for an already cheap car, and isn’t everyone flocking to small cars already?”
Did you mention that Corolla and Matrix both have 0% financing? And Civic has 1.9% How could this be?
WOW!!
Corolla 0% and Civic 1.9%!!!!Suprising that such high quality, lavishly appointed vehicles have incentives!
It’s a plot I tell ya!!!
Face it girls. ALL manufacturers are having a harder time getting sheep in the dealer. Some more than others.
Only thing selling really well are used cars. Metros and CRX’s are selling for almost a new price. Those got 50 MPG. What was GM they thinking when they sold THOSE things!!!
Skooter :
Did you mention that Corolla and Matrix both have 0% financing? And Civic has 1.9% How could this be?
Hadn’t noticed honestly. Not surprised to hear that, since corolla sales have been sluggish all year and really came back in may.
Annual Meeting
Well another one in the books. Once again what should have been an open dialogue between shareholders turned instead into another rendition of the Red Ink Rick media show. I for one am sick of hearing the term “turnaround”. Actually this company needs to “reverse”, going back to what made us successful in the past. Under Mr Wagoner it’s the same old story…more closings, cuts, jobs eliminated, assets up for sale, and heavier borrowing.
Wilmington is a nice city but coming here is gettiing depressing. Listening to Wagoner trying to gloss over the negative news is something bordering on comedy. Our troubles are always blamed on one excuse after another. Either it’s health care costs, pension liabilities, exchange rates, government regulations, trade policies, fuel prices, the weather, wages, material costs, or the competition. NEVER does management look in the mirror and accept responsibility for their failure. Yet it is the job of management to deal with the aforementioned concerns and produce a profitable return for investors. Even so, the executives in charge at GM will not change, it’s not in their self interest. Don’t spend much time waiting for the Board of Bystanders to do anything about it either.
As I do every year, I spoke in the meeting about the real problem at GM, namely our marketing. We have the worst in the industry. There is a different way of doing business. There are solutions available.
Look for example at the marketing of Buick. The so called experts at GM have changed the slogan so often in the past couple years, it’s hard to keep up. We’ve gone from “Spirit of American Style” to “One Better” to “It’s All Good” to “Dream Up” to “Beyond Precision” to “Drive Beautiful”. Add to this the most ridiculous incentive structure imaginable, confusion beyond belief. How in the world could anyone realistically expect to have any strength of brand imaging when the sands are constantly shifting? Is it any surprise that the average Buick dealer delivers only three units per month?
We need to remember the bit about doing the same things and expecting different results. Ain’t gonna happen. That’s why GM continues to steadily lose market share and why they will continue doing so. Until someone at GM steps up and implements significant change in our marketing, the “turnaround” will just keep going in circles.
How far can Wagoner go with his surgery? How many more Billions will we lose before people get together and rid this company of the man responsible for virtually destroying GM? He has alienated employees, built mistrust amongst retirees, starved Buick dealers of product, taken control of retail with a nightmare plethora of rebates, bankrupted suppliers, and disillusioned customers to the point of no return. And the man didn’t know the price of gas was going up? We’ve been informed that the financial statements aren’t accurate. Apparently our economists aren’t any better than our accountants.
Buickman,
Imagine if some fairy moved a magic wand and offered early retirement to select high ranking executives and the board of directors.
The fairy would say “We are removing GM from life support, giving a well deserved rest to the folks that were managing the company on life support by offering them a compelling early retirement package, we are freshening to board of directors too”
“We are rehabilitating GM as a viable automotive manufacturer, we will give customers a good product that is responsive to the current realities, and we will give the shareholders a reason to feel good about their investment”
The fairy dissappears at midnight and its back to reality.
Some of the detailed statistics are stunning, with declines of 35 to 50 percent or more compared to May ’07.
The thing that puzzles me is that used car prices seem to be holding up much better than the new car market would suggest. For example, Buick is a brand that is supposed to be at death’s door. Sales, which weren’t that great in recent years, continue to fall. But I see CarMax has a $19,599 price (and no haggling!) on an ex-fleet 2006 Lucerne CXL with 19K miles. You can drive a new 2008 CXL out of the showroom for $26,500. Where’s that terrible depreciation I keep hearing about? Steven Lang has posted on the lack of demand at auction for large SUV’s and pickups–could it be that only Yukons and F-150’s are unwanted now?
Nope, they are pretty much producta non grata across the board.
The only larger vehicles that are doing well right now are the compact SUV’s and certain minivans. That’s it.
I picked up a cherry 1996 Olds Bravada with all the options, perfect history, and pristine condition, for $1550. A year ago it would have set me back close to $3 grand.
1999 to 2000 Expeditions are going from $3000 to $4000 in many instances. Heck, I’ve got a friend of mine who picked up a 1995 Suburban at an impound lot sale for $750. He’s still driving it around for kicks (he’s also filthy rich).
Pickups can always be sent South or East. Older SUV’s simply don’t get sent anywhere…. except the auction.
Quite some time ago I opined that GM should simply fire anyone making more than some arbitrary salary, say $200k per year, and then promote the brightest young people on the next rungs down the ladder in hopes that there is some talent and brain power which hasn’t already been ruined by the many years inside the GM Dead Zone. It was a radical proposal and drew many snide remarks, but I doubt that the youngsters could have run GM any worse than it has been these past several years.
Where is the compelling product portfolio Lutz was supposed to usher in? A couple of OK products does not a portfolio make.
“1999 to 2000 Expeditions are going from $3000 to $4000 in many instances”
Now, that’s depreciation. Yet CarMax in Irving, TX wants $8,599 for a 1999 Expedition with 91K miles. Pretty good markup…unless they took it into inventory six months ago.
I dunno — I’ve been to the CarMax website, and I think that their prices are quite high.
As to GM, when they dropped the Camaro, (in favor of TrailBlazers and other such junk), updated the Cavalier into the oh-so-sweet (sic) Cobalt, they lost me as a customer. The I4 Malibu (while their best effort in years) was out of my price range, and has little more interior room than my ($7,000 cheaper) Elantra.
Buickman
I can imagine these must be the most frustrating meetings to attend ever.
Carmax has to pay for their eight-figured facilities, 5000 plus employees, shareholders, corporate office, executives, and extensive marketing. Their prices aren’t competitive from a pure cost standpoint, but they do a lot to eliminate uncertainty and provide disclosure.
They primarily rely on folks who hate going to dealers, know little about cars in general, and are willing to pay a premium to not get a product with substandard history or repairs. It’s a strong formula that’s worked wonders for their bottom line.
They also make an absolute killing on trade-in’s. But that’s a subject for another rant.
INDIVIDUAL COMPANIES AND MARKET SHARE
May08 / Market / Yr-to-Date / Market
Maker Volume % Chng Share Volume % Chng Share
=============================================================
GM 268,892 -30.2 19.3 1,326,906 -17.2 21.4
Toyota 257,404 -7.9 18.5 1,046,852 -5.0 16.9
Ford 205,379 -18.8 14.7 939,000 -12.4 15.1
Chrysler 148,747 -28.2 10.7 750,369 -20.5 12.1
Honda 167,997 +11.3 12.1 655,819 +3.1 10.6
Nissan 100,874 +4.4 7.2 446,474 -0.8 7.2
Hyundai 46,415 +1.8 3.3 181,033 -4.8 2.9
Mazda 27,921 +0.4 2.0 129,370 +0.3 2.1
BMW 31,781 -0.7 2.3 131,758 -3.9 2.1
Kia 31,047 +4.9 2.2 129,327 -0.6 2.1
Mercedes 21,785 -3.6 1.6 99,703 -0.5 1.6
Volkswagen 22,346 -3.6 1.6 92,316 -7.0 1.5
Subaru 18,436 +9.0 1.3 76,088 +2.5 1.2
Suzuki 10,364 -1.5 0.7 46,458 -1.8 0.7
Mitsubishi 10,430 -26.4 0.7 46,389 -20.4 0.7
Volvo 7,238 -24.2 0.5 39,180 -12.8 0.6
Audi 8,534 -6.5 0.6 36,820 -4.4 0.6
Land Rover 3,003 -32.3 0.2 14,292 -24.7 0.2
Porsche 0 NA 0.0 0 NA 0.0
Saab 2,148 -28.0 0.2 10,196 -20.6 0.2
Jaguar 1,757 +22.7 0.1 7,021 -2.0 0.1
Isuzu 510 -30.5 0.0 2,975 -5.6 0.0
Others 0 None 0.0 0 None None