GM sales jump 49 percent for February
Discounts, financing options help fuel 49 percent increase in sales figures for February
Paul Sancya, Associated Press
DETRIOT — General Motors Co. said U.S. sales of its four remaining brands rose 49 percent in February, topping analysts' estimates, as discounts and new financing options lured buyers.
Deliveries in the month increased to 207,028 vehicles, Detroit-based GM said today on its website. The results beat four analysts' average estimate for a 36 percent increase.
GM expanded lease offerings in February and kept incentives it used to top the industry's sales gains in January, said Don Johnson, the company's vice president of U.S. sales. GM's finance unit offered leases in twice the number of U.S. states as a month earlier and led partners such as Ally Financial Inc. to make more competitive offers to dealers, he said.
"Our marketing momentum is building, our dealer strength is building, and our financing capabilities through GM Financial and Ally are building," Johnson said Monday in a briefing with reporters at GM's headquarters. "Those are the things that will allow us to dial back a little bit on incentives and maintain our momentum."
Chevrolet brand sales rose 43 percent to 142,919 vehicles, and Buick deliveries increased 73 percent to 15,807, the company said. GMC sales gained 59 percent to 32,534, while Cadillac deliveries climbed 70 percent to 15,768.
GM fell 20 cents to $33.33 at 10:50 a.m. in New York Stock Exchange composite trading, rebounding from an intraday low of $32.88. The shares have climbed 1 percent from their $33 initial public offering price.
Industrywide light-vehicle sales in February may run at a 12.5 million annual rate, the average estimate of 10 analysts surveyed by Bloomberg. The seasonally adjusted rate in January and December was 12.6 million, the fastest since the 14.2 million rate during the U.S. government's "cash for clunkers" incentive program in August 2009, according to Autodata Corp. in Woodcliff Lake, New Jersey.
Confidence among U.S. consumers rose in February to the highest in three years, according to separate reports last week from the Conference Board and Thomson Reuters/University of Michigan. The percentage of consumers planning to buy a new vehicle within six months increased to 4.6 percent from 3.1 percent at the end of last year, the Conference Board said.
Chief Executive Officer Dan Akerson is pushing for quicker development and introductions of new models as the automaker revamps a vehicle lineup that has aged more than rivals such as Ford Motor Co.'s, due in part to GM's bankruptcy in 2009.
GM's spending on incentives will "start to moderate in March," Johnson said yesterday. Incentive spending rose 16 percent to an estimated $3,663 per sold vehicle in January, the highest among major automakers, according to Autodata.
"They are at the top of the industry once again in terms of incentives," Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio, said yesterday before GM released sales results. "I wouldn't say they are falling into bad habits yet. With an older product portfolio, they should have higher incentives. It's a number to keep an eye on."
GM expects to be "roughly in line" with the industry by the end of the year in incentive spending, Johnson said yesterday.
General Motors Financial Co. expanded lease offerings to 16 states in the eastern U.S. last month, from eight at the end of January, GM's Johnson said. GM expects to be offering leases throughout the country with GM Financial by about halfway through the year, he said.
GM acquired and renamed the lender, formerly known as AmeriCredit Corp., in October last year. The acquisition has brought GM closer to the industry average for leases as a percentage of U.S. sales, and partners including Ally are stepping up offers for subprime buyers and lease customers.