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June Cruze sales down 17.6 percent
LORDSTOWN
June sales for the Lordstown-built Chevrolet Cruze were down 17.6 percent compared with last year, according to data released Friday by General Motors.
GM sold 18,666 Cruzes last month, compared with 22,647 in June of last year.
The reason for the drop in sales is twofold, analysts said.
First, GM is cutting back on its fleet sales and focusing more strongly on retail sales to individual consumers.
Secondly, the next-generation Cruze is in the midst of a launch. The Lordstown plant is still working to ramp up its production and meet what analysts say is strong demand for the vehicle that first started shipping out to dealers in March.
“The Chevy Cruze is down from last year. I think a lot of this is due to the changeover that GM is having from going to an older vehicle” to a new model, said Patrick Min, senior industry analyst for TrueCar. “Some of that is getting the plant up and running at full pace, which can take some time.”
Robert Morales, president of United Auto Workers Local 1714, acknowledged that challenge but said the Lordstown plant is working hard to meet customer demand.
“One thing that we do know is that the [next-generation] Cruzes are a hot commodity, and we look forward to accommodating our customers,” he said. “Eventually, we’ll have enough Cruzes out there to satisfy the need.”
Total GM sales for June were down 1.6 percent year-over-year. The company sold 255,210 vehicles last month, compared with 259,253 last June. Of those sales, 209,295 were retail sales.
Analysts attribute the total sales decline to the reduction in fleet sales.
“GM continues to be focused on things that can improve residual values, so I think we see them being more tempered in terms of their rental fleet strategy, which the Cruze has been a big part of,” said Min.
“I think it’s a challenging time to be launching a new sedan when consumers are so focused on the utility vehicles, but I think GM is showing its commitment to a more responsible and measured sales strategy as they focus on profitability in the long run,” he said.
Analysts say June was a strong month overall for U.S. auto sales. Sales in 2016 remain on pace to exceed 2015’s sales of 17.5 million vehicles.
Fiat Chrysler Automobiles reported a 7 percent year-over-year sales increase. Honda’s sales were up 3.2 percent compared with last year. Toyota’s year-over-year sales were down 5.6 percent for June. Ford’s sales were up 6.4 percent.