GM said that tight supplies of midsize pickups, including the GMC Canyon, hurt its sales in January. Image source: General Motors.
General Motors (NYSE: GM) said that its overall U.S. sales fell 3.8% in January, a drop that it blamed on low supplies of key models after very strong sales in December. GM said that its retail sales fell 4.9%.
GM's overall sales decline exceeded the 2.8% year-over-year drop expected by Wall Street analysts polled by Bloomberg. GM's shares were off by about 1.5% in midday trading after the announcement.
GM's sales: The raw numbers
|January||Total Sales||Year-Over-Year Change||Retail Sales||Year-Over-Year Change|
Data source: GM.com .
Strong retail showings for some key products and a nice debut for the Bolt
Some GM products did surprisingly well at retail in January. The compact Chevrolet Cruze gained 22% year over year, an impressive showing in what has been a weak market for compact sedans. Sales of the plug-in hybrid Chevy Volt, all new since last January, rose 56% at retail. GM's big SUVs did well, with the Chevy Tahoe and Suburban and Cadillac Escalade all posting solid gains at retail.
A surprising bright spot was the Chevy Bolt EV. The Bolt has been on the market for less than two months and is only available at a handful of dealers, mostly in California. But despite the very limited availability, GM sold 1,162 examples of the innovative electric model in January.
Availability of the Chevrolet Bolt EV will expand over the next few months. Sales should grow as it does. Image source: General Motors.
The real bright spot is that demand for the Bolt appears to be very strong. GM reported that the Bolt's "days to turn," a measure of how quickly a vehicle sells after arriving on a dealer's lot, was just seven days, fastest of any vehicle in the U.S. in January.
GM is in the process of ramping up Bolt production and expanding its availability to other parts of the country. It looks likely that the Bolt's monthly sales totals will increase steadily over the next several months as that happens.
GM's high-profit pickups had a rough January
"In early January, we focused on profitability while key competitors sold down their large stocks of deeply discounted, old-model-year pickups," said GM's U.S. sales chief, Kurt McNeil, in a statement. That might be true of some of GM's competitors, but not all.
The good news for GM's profitability is that average transaction prices (ATPs) for GM's Chevy Silverado and GMC Sierra pickup rose about $1,750 from a year ago, to roughly $43,650 in January, according to J.D. Power PIN data made available to The Motley Fool.
But sales of Fiat Chrysler Automobiles '(NYSE: FCAU) Ram pickups and FordMotor Company 's(NYSE: F) F-Series were both up, 4% and 12.5% respectively. And while Ram's discounts were indeed steep, Ford's weren't: The F-Series' ATPs rose much more than GM's, by about $3,800, to roughly $46,400 per truck.
Looking ahead: GM's outlook for U.S. sales in 2017
"Our go-to-market strategy in 2017 is the same as 2016," McNeil said. "We are focused on strengthening our brands, growing retail sales and share, reducing daily rental deliveries and maintaining our operating discipline."
GM didn't give specific guidance for its sales expectations in 2017. It did, however, reiterate that it's "optimistic" about its profit outlook, in large part because it has several all-new crossovers coming to market in the U.S. and elsewhere.
The all-new 2018 Chevy Equinox should help boost GM's sales and profits in 2017. Image source: General Motors.
Those new models include all-new entries in the high-volume compact crossover segment, the redesigned 2018 Chevrolet Equinox and GMC Acadia, as well as all-new versions of the larger Chevy Traverse and GMC Terrain . GM is also expected to unveil an all-new version of the big Buick Enclave this spring. They'll join the Buick Envision and Cadillac XT5 , both of which were all new last year.
Those new models should generate more profit per vehicle than the models they replace. And given that they're all in high-volume segments, GM's optimism about 2017 seems justified.
10 stocks we like better than General Motors
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and General Motors wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 4, 2017
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.