Morningstar | GM's First-Quarter Sales Show Improved Pricing and Robust Crew Cab Pickup Growth
Automakers' March U.S. sales show a continued year-over-year slowdown for 2019. March industry sales fell 3.1% versus March 2018, but we calculate a 0.5% increase adjusting for one less selling day. The seasonally adjusted annualized selling rate was healthy at 17.42 million versus 17.33 million in March 2018. First-quarter sales declined 3.2%, but we calculate it fell 2% adjusting for selling days. We still look for a high 16 million unit sales year due to automakers wisely pulling back on leasing to protect residual values and due to the likelihood this is a peak year for off-lease vehicles, drawing shoppers back to used over new. Light truck models demand continues to be high--good news for GM, which started production of all cab types of its new generation full size pickups in March.GM only reports quarterly sales, which fell 7% relative to first quarter 2018. We calculate a 5.8% decline adjusting for one less selling day in first quarter 2019. GM's midsize pickups outperformed the company's total volume decline with the Chevrolet Colorado up 16.1% and the GMC Canyon down 3.6% but the full size Silverado declined 15.7%. We are not concerned with this decline because GM for most of the quarter only made crew cabs. Management made it clear over a year ago it would prioritize increasing crew cab penetration, which should lead to a more lucrative mix of pickups sold. Combined Silverado and GMC Sierra crew cab sales in the quarter increased 20%, so Silverado's overall decline is from limited production rather than poor demand. We expect a strong second quarter for GM's full size trucks, and the new generation heavy duty models launch in the second half of the year. Other 2019 launches are Cadillac's first three row crossover, the XT6, the Cadillac CT5 sedan, and the Chevrolet Blazer crossover that just started selling. GM's incentives as a percent of average transaction price fell 80 basis points to 13%, and GM posted record first-quarter pricing of $35,881.
General Motors designs, builds and sells trucks, crossovers, cars and automobile parts. The company also provides automotive financing services through its subsidiary, General Motors Financial Company, Inc. (GM Financial). GM Financial provides retail loan and lease lending across the credit spectrum. GM Financial provides commercial lending products to dealers including new and used vehicle inventory floorplan financing and dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital, and to purchase and/or finance dealership real estate. Other commercial lending products include financing for parts and accessories, dealer fleets and storage centers.
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