DETROIT -- General Motors sales sank 18 percent in May amid the disruption of several key vehicle launches from earthquake-related supply problems, as well as its biggest drop in rental deliveries this year.
GM sold 240,450 light vehicles last month, which included about 22,000 fewer deliveries to daily rental operators vs. a year earlier. Had its rental business stayed flat with last year, GM’s overall sales still would have fallen about 10 percent.
GM said the closure of four assembly plants for two weeks because of a supply disruption related to the April earthquake in Japan crimped supplies of several key vehicle launches, including fresh redesigns of the Chevrolet Cruze, Cadillac XT5 and GMC Acadia.
“Current dealer inventories for launch products are about half of what we’d like,” Kurt McNeil, GM’s vice president of sales operations, said in a statement. “But availability is improving, which sets us up well for the second half of the year.”
All four of GM’s brands saw steep declines: Chevrolet fell 19 percent, Buick sank 22 percent, Cadillac fell 16 percent and GMC dropped 14 percent. Each brand now shows a sales decline for the year.
GM said retail sales were down 13 percent, which it estimated would be in line with the industry’s retail performance.
The bright spots in GM’s May numbers were its pickup and SUV sales, which fared better than its cars and crossovers. Combined sales of its profit-rich big SUVs -- the Chevy Tahoe and Suburban, GMC Yukon and Yukon XL and the Cadillac Escalade and Escalade ESV -- rose 1.9 percent. Combined sales of Chevy Silverado and GMC Sierra full-size pickups fell 11 percent.
GM’s overall sales fell 5 percent through May as the company throttles back on its rental business, a strategy to improve its resale values and the health of its brands. Its rental sales through May dropped about 20 percent.
“Our rental reduction strategy is clearly divergent from our key competitors,” McNeil said. “It’s playing a critical role in our efforts to strengthen our brands, improve our residual values and build the fundamental health of our business.”
One big factor in the rental pullback: Chevy is launching redesigns of two cars that historically have been rental-lot staples: the Chevy Malibu and Cruze sedans. GM North America President Alan Batey told Automotive News last month that consumer reception to those vehicles has been hot and that the company doesn’t want to sell those early models to rental companies when retail demand is high.
GM said today that its retail sales are up more than 1 percent through May and that its retail share rose 0.6 percentage points, which it called “the largest retail share increase of any full-line automaker.”
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.