Morningstar | GM's Second-Quarter Sales Get Pricing Boost From Light Trucks
Automakers' June U.S. sales show a similar pattern to the rest of the year. June industry sales, excluding Ford, which reports July 3, fell 2.2% versus June 2018, but we calculate a 1.6% increase adjusting for one less selling day. Sales are down 2.3% for the first half of 2019, excluding Ford. We still look for a high 16 million unit sales year due to both automakers pulling back on leasing to protect residual values and a likely peak year for off-lease vehicles, drawing shoppers back to used over new. Light truck model demand remains strong, which is good news for GM with its new generation light duty full size pickup inventory nearly at full levels across all cab trims. GM also started shipping new generation heavy duty trucks in late June. The ramp will focus on crew cab first, just as GM did with the light duty launch last summer.GM only reports quarterly sales, which fell 1.5% year over year relative to second-quarter 2018. Light trucks are over 80% of GM's volume and GM's focus on retail pickup sales over fleet business showed in the numbers. Silverado sales, for example, fell 8.4% as the inventory ramp up for regular and double cab meant limited availability for pickups. Lucrative crew cab pickups, which GM has been making for the new generation since last summer, have increased their mix to 75% from 60% of pickup sales. These helped GM's overall average transaction prices rise by $1,575 to a second quarter record of $37,126. Second-quarter record crossover sales also helped with these vehicles up 17%, and large SUVs such as Tahoe and Suburban both grew 20%. We believe these pricing tailwinds, along with an 80-basis-point reduction in incentives as a percent of average transaction price, give GM a shot at good numbers in second-quarter results out Aug. 1, despite lower volumes. Third-quarter 2019 sales should see a full strength quarter for light duty pickups but lower volumes on heavy duty as that truck ramps up production.
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.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.