April Cruze sales drop 30% from ’11

Staff and wire report

Detriot

Sales of the Chevrolet Cruze dropped by nearly 30 percent to just over 18,000 in April compared with the previous year.

There were 18,205 of the Lordstown-produced vehicles bought in April, down from 25,160 in April 2011.

Sales to rental-car companies dropped 25 percent for the month. Retail sales to individual buyers were flat, according to General Motors Co.

Dave Green, president of United Auto Workers Local 1714 at the GM complex in Lordstown, said the dip in sales is not a reason to be concerned. There were several reasons for sales to be down in addition to rental- car sales’ being down. It was a shorter sales month by three days, and GM does not have a lot of incentives for the Cruze, he said.

“We used to have a lot of sales of the Cobalt and Cavalier when they put a lot of incentives on the windshield,” Green said.

GM is relying on the quality of the Cruze as its selling point. The company may be selling fewer vehicles but is making more profit by offering fewer incentives, he said.

“Eighteen thousand is still a lot of cars,” Green said.

GM is avoiding discounts to match competitors. For example, Toyota sells the aging Corolla compact for an average price of $16,917, said Alan Batey, vice president of Chevrolet. But people are paying an average price of $19,572 for the Chevy Cruze compact, he said.

“You can see that we’re not getting drawn into a discounted-sales position,” Batey said.

GM ended April with enough vehicles in inventory to supply dealers for 79 days. That’s more than the 60 days considered optimal. The company had a 121-day supply of big pickup trucks, down slightly from March. GM is building up pickup inventory as it prepares to close factories and equip them to make an all-new pickup due out in 2013.

U.S. sales of the Cruze have fluctuated over the past 13 months from the high of 25,160 last April to a low of 13,248 in November.

The lower sales figures for April come just after General Motors announced that 100 temporary workers would be hired full time at the Lordstown facility as part of UAW 1112.

Automakers spent an average of $2,071 per vehicle to discount cars and trucks in April. That was down nearly 2 percent from April 2011, and the lowest level since October 2005.

GM spent the most on incentives last month: an average of $3,446 per vehicle. Honda spent the least: an average of $992.

Overall throughout the auto-sales market Toyota and Chrysler saw big U.S. sales gains in April, while Ford had several vehicles that experienced significant sales declines.