GM recall fails to dent automaker’s May sales
Despite recalls and government fines, General Motors (GM) had a strong month on the sales lot in May.
The manufacturer moved 284,694 vehicles in the U.S., a 13% jump from May 2013, according to the company news release. This represents the best May GM has seen since 2007 and the carmaker’s best month overall since August 2008.
Cars sold to individual buyers were up 10%, while fleet sales were up 21%. This is expected to be the biggest month of fleet sales for GM in 2014.
Overall, May was another month of strong U.S. auto sales, continuing a trend that will likely see sales for the year reach 16.7 million units, according to data from Wards Auto. That’s the strongest pace since February 2007 and significant recovery from the drop in sales that followed the financial crisis, when car sales bottomed out at 10.4 million units sold in 2009.
According to Wards Auto, 1.6 million cars were sold in the U.S. in May. The strong monthly gain suggests rising consumer demand and may point to a wider recovery in the U.S. economy.
“The momentum we generated in April carried into May, with all four brands performing well in a growing economy and 17 vehicle lines posting double-digit retail sales increases or better,” said Kurt McNeil, U.S. vice president of GM’s sales operations.
Indeed, in addition to hitting the beach and firing up the grill, it seems Americans spent a lot of time on the car lot over Memorial Day weekend.
U.S. car manufacturer Ford (F) managed to report solid sales, despite dealing with its own big vehicle recall. Ford sold a total of 254,084 cars in May, up 3% from May 2013.
Other automakers capitalized on the warm weather. Chrysler said its sales were up 17% in May, reporting a total of 194,421 units sold. Included in that number were more than 70,000 Jeeps, the first time Jeep has ever topped that number.
Japan’s Toyota (TM) said it sold 243,236 cars in May, jumping 12.6% from the same month a year prior. Nissan moved 135,934 units, a 19% uptick.
All of GM’s major brands saw sales rise, with Buick having its best month since 2005 and Chevrolet and GMC posting their best numbers since 2007.
This might be the first good news GM CEO Mary Barra has heard since April sales were reported. Last month, GM was fined $35 million by the Department of Transportation and recalled 2.4 million more cars.
Steve Brown, managing director at Fitch Ratings, said that in this day and age companies can actually convince customers not to run from their brands after recalls.
“This message of new GM versus old GM may be kind of registering with them,” he said.
Dave Winslow, vice president of digital marketing with Dealer.com — the digital marketing division of Dealertrack Technologies — said that by being transparent, manufacturers are able to assuage the fears of customers who may have previously been put off by recalls.
“Consumers are becoming more savvy,” he said. “They actually will [go] to some research sites.”
Winslow said that his firm’s data backs up the idea that consumers are doing more research. He said that year-over-year Dealer.com saw a 28% increase in people visiting the Vehicle Details Page for a specific car on a lot, where they could check out everything the need to know about a potential purchase.
Brown also pointed out that with so many different companies having recalls in the past few years, customers may figure that the chance of getting a car recalled may be the same no matter what manufacturer they buy from.