GM's 16% drop in Sept. sales is no surprise

By Don Shilling

Cobalt sales dropped as 2009 models came out with lower rebates.

Given the nation’s economic worries and a pullback in credit, General Motors’ 16 percent drop in sales last month didn’t surprise one local dealership official.

“I thought it would be worse,” said Mike Hudock, general manager of Stadium GM Superstore in Salem.

GM’s offer of employee pricing to the general public probably saved sales from being much worse, he said. The deal ended Tuesday.

GM was among the automakers reporting large sales declines for September on Wednesday. Several others posted declines of more than 30 percent.

Hudock said walk-in traffic at his dealership has slowed for the past week as Congress considers whether to issue a $700 billion bailout to Wall Street investment banks.

But car dealers also are fighting against a decline in leasing and financing opportunities, he said.

GM is no longer leasing vehicles to customers, many of whom were attracted by lease payments of between $150 and $200 a month, he said. Buyers who only came to GM for lease deals are now shopping other brands, he said.

Financing also has become more difficult, he said. Fewer lenders are working with car dealers, and ones that are active want more documentation of finances and income, he said.

People who have a hard time verifying income can have trouble getting a loan, and people with marginal credit are paying higher interest rates, he said.

Still, new-vehicle sales were up at the Salem dealership last month, he said.

Barry Gonis, general manager of Spitzer Chevrolet in North Jackson, said he has seen an increase in cash sales. He wasn’t sure if it was related to the volatility in stock markets recently.

“Whether people are pulling their money out and buying a car, I don’t know,” he said.

He said his dealership was quiet Monday when stock markets took a steep drop, but the next day was his busiest day of the month.

Overall, his new-car sales for September were flat, but used-car sales were up.

Sales of the Chevrolet Cobalt, which is produced at GM’s Lordstown complex, were down 17 percent last month when compared with September 2007. GM sold 16,521 Cobalts in the U.S. last month. The total, however, was up 1 percent from August.

Dealers said Cobalt sales were sluggish in September because the 2009 models were out and the inventory of 2008 models was depleted. The 2009 Cobalts have a $500 rebate, compared with $1,500 for the 2008 models.

For the year, GM has sold 162,462 Cobalts, which is up 6 percent over this time last year.

The Lordstown complex also produces the Pontiac G5, which posted its best month ever in September. GM sold 3,280 G5s, compared with 2,673 in the same month last year.

shilling@vindy.com