Sales down with transition of Cruze Limited to new Cruze

May 4, 2016 at 12:09a.m.

YOUNGSTOWN

Sales reported by General Motors on Tuesday reflect the automaker’s transition from the Lordstown-built Chevrolet Cruze Limited to the next-generation Cruze.

The Cruze saw a 32.4 percent drop in sales. A total of 14,153 sales were reported in April 2016, compared with 20,947 in April 2015.

“We are getting the [next-generation] Cruze out to the customers,” said Glenn Johnson, president of United Auto Workers Local 1112.

The Cruze sales numbers reflect a selldown of the first-generation Cruze Limited. It’s ideal, Johnson explained, for the dealers to have a limited supply of the old Cruze so they can make way for the new Cruze.

But there’s some frustration out there from dealers because of a limited supply of the new Cruzes, which were shipped out starting March 21. Last week, the General Motors Lordstown Assembly Plant went on a two-week production suspension because of the impact felt by suppliers from the recent Japan earthquakes. Workers are scheduled to return Monday.

“At that point, we will be hitting the floor running again,” said Robert Morales, president of UAW Local 1714. “We do have a relationship with the dealers. [One] of the biggest concerns is not having enough of [the Cruzes].”

The Cruze’s year-to-date sales are down 37 percent year-over-year.

“Small cars, in general, are not seeing the lift that the utility vehicles are in the market,” said Patrick Min, senior analyst at TrueCar. “We do see a very stable market for the compact segment. It is still one of the largest in the industry.”

As for the Cruze sales, Min said it will take a few months for the new Cruze sales to really ramp up.

GM’s purposeful pullback on fleet sales likely will affect Cruze sales, Min said.

“Overall, that will impact the Cruze, but we do see a lot of strength in how [GM] will be able to increase the transaction prices as well,” Min said.

GM’s plan to reduce fleet sales and improve residuals led to a slight decline in sales for April.

GM’s total sales were down about 4 percent to 259,557 vehicles. Retail sales, or sales to individual customers, were 200,656 in April, up 3 percent year-over-year.

GM’s commercial deliveries were up for the 30th-consecutive month, while daily rental sales were down nearly 18,000 vehicles. Year to date through April, GM’s rental deliveries are down more than 61,000 vehicles from a year ago, as the automaker planned.

Outside of GM, sales across the board were much better than the last month. Total sales are expected to come in at about 1.5 million. Trucks and sport utility vehicles remained on trend in April.

“We don’t have any expectations to see this preference shift,” said Alec Gutierrez, Kelley Blue Book senior analyst.

American Honda Motor Co. Inc. reported a new April sales record of 148,829, an increase of 14.4 percent for the month. Analysts expected the Honda Civic to perform well, but its sales of more than 35,000 beat the expectation of 30,000 sales. The Civic is top competition for the Cruze.

“Honda has really kind of turned on their game again,” Min said.

Ford Motor Co.’s U.S. sales increased 4 percent in April versus a year ago, with 231,316 vehicles sold.

Fiat Chrysler Automobiles U.S. LLC reported U.S. sales of 199,631 units, a 6 percent increase compared with sales in April 2015.

“I think it’s pretty clear that there’s plenty of automotive life left in this cycle,” said Michelle Krebs, senior analyst at Autotrader.

In total, analysts expect to see sales this year come in at 18 million, which would break last year’s record of more than 17.4 million.

“We do see April being a continuation of a strong year for the U.S. market,” Min said.