Macro Notes from the GM Sep Sales Call

By Global Macro Monitor

We forgot to post this yesterday. The macro issues raised by GM in their September sales conference call. All are direct quotes from GM management.

General Motors – October 3

September was another very strong month for General Motors and our U.S. dealers. When you look at the numbers compared to September 2010, our total sales were up 20% to 207,145 units and all four of our brands saw increases in sales.

General Motors total passenger car sales increased 12% compared with September 2010. Our crossover sales increased 7% and truck sales and this includes pickups, SUVs as well as vans increased 34%. And across all of these three segments, retail sales were up 19% and totaled 74% of our mix, plus sales to fleet customers went up 22%.

…the incentive spike in the industry that a lot of people have been talking about in the last few months and had predicted as the Japanese OEMs recovered from the supply destructions does not appear to have materialized in the industry.

… our spending in September was actually down about $50 per unit compared with August while our average transaction price improved by more than $400.

Just like all of you, we are concerned about confidence. We are concerned about sentiment and about the budget battles in Washington. But having said that, we continue to expect that full year US total vehicle sales will be in the low end of our 13 million to 13.5 million unit range.

…our rationale for not revising our forecast is pretty straightforward. It comes down to a couple of things, first of all the timely end of production problems, for the most part, at our domestic and our Japanese competitors, which will bring people back into the market, people who have been on the sidelines.

The other factor is a modest, but steady continuing release of pent up demand as we continue to see the age of the fleet being 10.7, 10.8 years. So, a lot of those people continue to have to buy and come back into the market.

…industrial production, retail sales and employment data all point to a slow growth scenario not a double [dip].

…the rebound [in pickup trucks] was largely industry–wide. As I said, the segment as a percent of industry grew from 12% to 12.8%

… our full size utility were up about 56% and I think we characterized that in the latter comment more accurately, which is with gas prices stabilizing with at least some stability in consumer confidence we were totally surprised to see those vehicles increased in sales.

… clearly growth in employment is going to be one of the biggest drivers of the industry getting to we will call normal post recession growth rates. The good news right now is that we are at least seeing it stabilized, which I think is really important of really vehicle buying attitudes remain strong out there.

…Chevy Volt: 83% of the people [buyers]are new to General Motors, so they are new to the GM family which is great. The average household income was about $175,000 and the most traded in vehicle was actually the Prius