GM Selling Less Vehicles, At Record High Prices

[Gorehamj]

 

John Goreham
Contributing Writer, GM-Trucks.com
10-1-2018

General Motors' overall vehicle sales were down significantly in the past quarter. GM says it delivered about 11.1% fewer vehicles in the past three months compared to the same time last year. However, GM's bean counters have much to be happy about. GM's average transaction prices (ATPs) were up nicely. On average GM earned about $700 more per vehicle than it did in the comparison period.  GM's average vehicle transaction price is now $35,974. In essence, GM sold a lot fewer vehicles, but at a much higher price.

 

GM also slashed its costs. One area, in particular, stood out. GM slashed its discounts. In its report, the company says, "GM’s incentive spending was below the industry average and 2 – 6 percentage points below domestic and many Asian competitors." GM also added, "GM’s third quarter incentive spending was sharply lower than the company’s first-half average, which was 13.6 percent. Spending was down 1.6 percentage points year over year in the quarter." This jives well with the higher transaction prices GM is pleased to report.

 

GM's mix also continued its shift to trucks and is starting to return to its old habits of relying on commercial and rental sales. Even with much lower total sales, commercial sales were up 21% and rental sales were 10% of sales. About one in three vehicles GM builds don't end up in a private owner's driveway.  

 

With regard to model winners and losers, the Bolt is tanking. Sales dropped 41.1% vs. last year's Q3. The Volt, however, is up. GM's crossovers have also become very competitive, which is very good news.  

[Sierra Dan]

Sales are down because the price of new cars these days is simply outrageous.

Bottom line is that more people are purchasing used or CPO. Me Included! 

[SILVER SLED]

Unfortunately the rising cost of new vehicles across the board is driving up used car prices. 

 

The price of a new Encore dropped about $2,000 though.  I wonder if the Chinese built Encore will have a tariff soon?

[Sierra Dan]

Everything is going "UP"

Anyone priced a 2x4 at the big box store recently? 

[Daryl LBZ]

Doesn't the whole fleet ordeal lower resale value?

[Colossus]

Not if the reliability and quality has gone up. 

[BobHancock]

Good incentive to not buy new every year.  I might just hold on to this very fine truck in my garage. 

 

[O_J_Simpson]

Every quarter should be record high prices unless we are in deflation economic period. No one wants to go there as the economy would be crashing. It is called inflation when the prices go up as expected. No excuse for the massive sales drop for Ford or GM.