GM Misses Sales Expectations, Blames Weather; Ends Year With Most Ever December "Channels Stuffed"
Moments ago, GM, now fully non-government backstopped (and perhaps because of), reported adjusted US vehicle sales of 230,157, a decline of 6.3% from the 245,733 cars delivered a year earlier, on expectations of a 1.5% increase in sales. As Kurt McNeil, VP of US sales, announced "“December started a little slow but sales were stronger later in the month, especially in the week between Christmas and New Year’s. We didn’t make any big changes to our ‘go-to-market’ strategy during the month, which is to offer competitive incentives and market aggressively, and we are carrying good momentum heading into January." GM also was quick to put blame on wintry weather in December - fear not though, they won't be the last. It was unclear just how substantial GM's incentives were in a month in which below margin inventory liquidation was the name of the game for all retailers: we expect to learn soon.
Still, despite the weak December, GM did report a 7.3% increase in total 2013 sales, which rose from 2.6 million to 2.786 million sales, although judging by the weak end of year performance, many prospective buyers may have tapped out their government-funded car loans, which as we reported a month ago, represented together with student loans some 99% of all loan issuance in the past year!
The full breakdown of GM's December car sales can be seen below: of note - the surge in Corvette sales, which GM said had its best December sales since 2006. Perhaps less exciting was the 9.2% Y/Y drop in Volt sales. Are Americans losing their fascination with electric cars?
But perhaps the most interest datapoint in today's release, and one which may explain why GM's sales missed, was that the car's near record channel stuffing, which as we reported last month had soared in the past three months at a record pace, and was just shy of its all time high, saw a modest decline from 780K to 748K. Still, the latter number was still the highest ever December GM dealer inventory for the month of December in the restructured company's history. It would appears even dealers can't take any more, which also means to expect significant weaknesses in the various January manufacturing diffusion indexes and hard data points.
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