GM's Best January Since '08 Helped by Biggest Customer Discountsby
U.S. automaker led market in promotions, Autodata says
CFO says sell-down of older designs is only temporary
General Motors Co. bragged on Tuesday that the company had its best January sales in eight years and, excluding sales to businesses and rental-car companies, Chevrolet outsold the Ford brand.
The part that GM left out: It also gave customers bigger discounts than any other mass-market automaker last month at an average of almost $4,100 a vehicle, according to Autodata Corp. Ford Motor Co. spent $3,053. Fiat Chrysler Automobiles NV’s U.S. unit spent $3,846 and even Volkswagen AG, with sales slumping from its diesel-emissions scandal, spent just under $3,500 per vehicle, the Woodcliff Lake, New Jersey-based researcher said.
GM’s aggressive start to the year helped the automaker gain a little market share, especially with big offers on some slow-selling Buicks. The main strategy was to clear out inventory of some older new models that are being replaced with an all-new design, like the Chevy Cruze compact car and Cadillac SRX sport utility vehicle.
“What inflated incentives in January was the sell-down of some models like the Cruze and SRX,” Stevens told reporters Wednesday after GM announced fourth-quarter earnings. “One month does not make a trend.”
Buick had a big month that was helped by offers such as $500 off and zero-percent five-year loans on the Regal sedan and Enclave large SUV. Regal sales more than tripled to 2,653 cars, spurring the brand to a 46 percent increase.
Relative to Price
GM spokesman Jim Cain explained that even though its cash discount is high, it’s in line with competitors relative to the high selling prices. GM’s discounts as a percent of average transaction prices were just above Ford’s 12.2 percent, he said in an e-mail.
In the fourth quarter, GM was discounting cars by 11 percent, according to company data. GM has been pretty consistent in trying to keep incentive spending down to preserve margins, Stevens said.
“Our track record of the past six years is more important than one month,” he said.