Three Trends Affecting GM Car Sales In The U.S.
General Motors (NYSE:GM) has seen its new vehicle sales in the U.S. auto market decline by 3.6% so far this year. The worrying thing for the U.S. auto maker is that it has seen its new vehicle sales decline across all segments. In the table below, we take a look at two of the highest selling GM brand vehicles in each market segment to try to analyze the broad trends affecting the company.
Trucks
GM enjoyed record profitability in 2015 as its pick-up trucks Chevrolet Silverado and GMC Sierra combined outsold Ford’s F-150 pick-up trucks, the highest selling vehicle in the United States. As Ford shut down production at two of its plants to manufacture a new version of the F-150 and stuffed its dealerships with inventory of the old F-150, dealerships soon ran out of the popular pick-up truck to sell. Moreover, Ford tried to control the sales of the truck by only selling to higher margin customers. GM reaped the benefits of this strategy and as a result Silverado and GMC Sierra gained market share resulting record profits for the company. In 2016, however, inventory levels of Ford are back up and production levels are running at maximum capacity. GM’s sales as a result have failed to keep pace with 2015 levels.
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SUVs
SUVs and Crossovers are the best selling market segments in the U.S. auto market. However, just like with the passenger car market, Japanese auto makers, Toyota, Honda and Nissan now have market leading models in these segments as well. Ford does extremely well in this segment too, but GM in contrast seems to be struggling. GM has the 15th highest selling vehicle in the U.S. with the Chevrolet Equinox but its next highest selling SUV Traverse is only the 42nd highest selling vehicle. In comparison, Honda, Toyota and Ford have higher selling cars in these segments. Moreover, Equinox sales have declined by 18% on a year over year basis.
Cars
Car sales have declined in the U.S. over the last couple of years. In 2016, car sales have declined by 8.9% so far this year. GM has also suffered as a result of this trend, especially as competition in this segment with Honda’s Civic and Accord, Toyota’s Camry and Corolla, Ford’s Fusion and Focus and Nissan’s Altima and Sentra is especially tough. Sedan sales for the company have declined by 6.5% on a year over year basis so far this year. Going forward, we expect car sales in the U.S. to continue to be sluggish and growth in this segment will be especially hard to come by. In this respect, 8.6% growth in sales of the Chevrolet Malibu is encouraging for the company, as it shows customer loyalty that the company can tap with new model launches.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for General Motors
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