Cruze’s overall sales down, retail sales increase

March 2, 2016 at 12:02a.m.

Dealers continue selling down vehicles from first generation

LORDSTOWN

Although its overall February sales dropped 29 percent in part due to fleet sales, the Lordstown-built Chevrolet Cruze’s retail sales to individual buyers were up 27 percent.

“Quite honestly, there aren’t a lot on the market,” said Glenn Johnson, president of the United Auto Workers Local 1112. “I would believe that the pickings are getting slimmer, and we hope people are awaiting the arrival of the next-generation Cruze.”

Production at the Lords-town plant on the new Cruze is underway for the compact car’s spring showroom debut.

As GM prepares for the new Cruze to come out, dealers are selling down the first generation, which means the Cruze inventory has dropped.

“You don’t want a big supply of the old model when the new one launches,” said Tim Fleming, analyst for Kelley Blue Book. “It’s important to sell down.”

GM’s cutback on fleet sales also impacted the Cruze last month.

GM reduced daily rental deliveries by about 16,500 units, or 39 percent in February.

The company said Tuesday it expects to operate with a 70-day supply of vehicles throughout the year in most months.

Fleming explained this is a strategy on GM’s part to not overproduce like it did in the past to chase more sales.

“It will make them more profitable in the long term,” Fleming said.

The pullback on fleet sales impacted overall sales for GM, which came in at 227,825 for a 1.5 percent decrease overall.

“It’s short-term pain for long-term gain,” said Eric Lyman, vice president of industry insights for TrueCar.

The company’s retail sales and market share continued to grow in February. Retail deliveries were up 7 percent to 179,598 sales.

The Chevrolet brand remained the industry’s fastest-growing brand in February, with retail deliveries climbing 13 percent compared to a year ago.

GM noted the importance of tailoring products to the millennial generation, which accounts for 20 percent of GM sales, up from 5 percent in 2010.

The newly redesigned Cruze, Volt, Camaro, Malibu and Trax, all launching this year, are expected to appeal to that generation.

Johnson and Robert Morales, president of UAW Local 1714, both said production on the next-generation Cruze is moving along.

“I think every day we are learning the processes,” said Morales, who represents the fabrication plant workers. “Learning from our history, we want to do things right the first time.”

Johnson, who represents the assembly plant workers, hopes to see the new Cruze make a huge impact as soon as it hits showrooms.

“The biggest thing we are looking to do right now is keep our commitment and have it in showrooms by early spring,” Johnson said.

Overall, auto sales were strong in February, which is typically a slow month.

Ford Motor Co. U.S. sales were up 20 percent in February versus a year ago with 217,192 vehicles sold. Retail sales grew 11 percent for the company’s best February since 2005.

American Honda Motor Co. Inc. reported record February sales of 118,985 Honda and Acura vehicles for an increase of 12.8 percent.

The all-new 2016 Honda Civic, a top competitor for the Cruze, sets a new monthly record for the second month in a row with sales up 31.7 percent.

Fiat Chrysler Automobiles U.S. LLC reported U.S. sales of 182,879 units, a 12 percent increase compared with sales in February 2015, and the group’s best February sales in 10 years.

“This is a very strong start to the 2016 calendar year sales,” Lyman said. “There’s no indication it will let up.”