GM’s brands saw decreases in deliveries in first quarter

By GRAIG GRAZIOSI

ggraziosi@vindy.com

LORDSTOWN

General Motors sales fell by 7 percent during the first quarter, including a devastating 41.5 percent drop for the Lordstown-made Chevrolet Cruze, according to data released Tuesday.

There were 23,311 Cruzes sold during the first quarter of 2019. During the same time period last year, GM had sold 39,855 Cruzes.

Each of GM’s four brands saw decreases during the fourth quarter, with Chevrolet dropping 7.8 percent to 452,401; Buick dropping 8.7 percent to 51,567; Cadillac dropping 2 percent to 35,995 units; and GMC dropping 4.4 percent to 125,577 units.

Dave Green, president of United Auto Workers Local 1112 in Lordstown, said despite the hit the Cruze still sold better than other models GM has chosen to continue.

“I stand by the quality of the Cruze. I think there’s just not as many Cruzes to sell. The company has put the incentives on other vehicles,” Green said.

Green isn’t wrong; despite its drop, the Cruze model outsold the Impala, Suburban, Tahoe and all of Chevy’s electric and sport offerings. Of the 19 Chevy brand vehicles, only six sold more units than the Cruze in 2019.

The Colorado and Equinox saw increases of 16.1 percent and 7.4 percent, respectively. The Silverado saw a decrease of 15.7 percent to 114,313 units.

“We are bullish on pickups and expect to gain sales momentum throughout the year,” said Kurt McNeil, GM’s U.S. vice president of sales operations. “We are installing capacity in Flint to build more HD pickups in total, more crew cab models, more dualies and diesel models, too, all in response to dealer and customer demand.”

Cox Automotive analyst Charlie Chesbrough said GM car sales continued to decline.

“The Cruze numbers were bad, as one would expect. Chevy’s looking to get out of that brand for a reason,” Chesbrough said. “They’re not likely to come back anytime soon.”

The Lordstown Assembly Complex that manufactured the once-popular sedan was idled March 6. GM has said the plant’s future depends upon contract talks this summer with United Auto Workers. It is not allocated a new product.

Chesbrough said the only example of a car bucking the tanking trend is Honda.

“Their car numbers looked fairly strong, they were up a little over 4 percent month over month,” he said.

Automobile sales in the U.S. fell 2 percent in the first quarter, another sign the nation’s economy is starting to slow.

Automakers sold just over 4 million vehicles from January through March, according to Ward’s Automotive Intelligence, and industry analysts blame the decline on rising vehicle prices, competition from an abundant supply of late-model used vehicles and relatively high interest rates.

Weak sales of cars, harsh winter weather and the partial government shutdown also had an impact.

Most analysts are predicting vehicle sales of about 16.9 million this year, still strong but down from last year’s 17.27 million. Sales peaked in 2016 at 17.55 million.

Prices are a big factor. The National Automobile Dealers’ Association reported the average new-vehicle sales price was $36,410 in the end of the first quarter, up 3.3 percent from a year ago. Auto-loan interest rates, on average, hit their highest point in a decade at 6.36 percent, up from 5.66 percent a year ago, according to Edmunds, which provides content to The Associated Press.

Chesbrough said the overall light-vehicle market was growing slower than expected.

“There’s a lot of possible factors. Right now the housing market is looking weak, which may hurt overall demand. We also may just be in the late stages of this vehicle market. There were 85 million new vehicles added to the market over the last five years. If folks are keeping those vehicles for 6, 7, 8 years, that’s a lot of consumers out of the market.”

GM has been on the receiving end of criticism from labor unions, elected officials and President Donald Trump after an announcement in November it would “idle” five North American plants, including the GM Lordstown.

While the company has taken a pounding in the headlines, Chesbrough said it was unlikely to make much of a difference in its sales numbers.

“It’s difficult to quantify the bad press they may be getting. Folks who were working in those plants probably aren’t lining up to buy their vehicles anytime soon, but to the general consumer nationwide it’s probably not much of an issue,” Chesbrough said. “Consumers have a lot to absorb day to day, so I’d be very surprised if the strategic decisions made at the corporate level really are factoring into their purchasing decisions.”

Contributor: Associated Press