General Motors sales grew 5% in 2014 despite recall crisis

Article by Christian A., on January 8, 2015

General Motors logged a 19-percent surge in sales in the United States in December 2014, as the carmaker experienced high demand for trucks and offered a 20-percent discount in the month. The surge in December sales allowed GM to post an overall sales jump of 5 percent in full year 2014 – despite the negative publicity brought by recalls of around 27 million vehicles in the US in the period.

GM’s sales results, however, were lower than the US auto industry’s projected 6-7 percent gain. GM offered a 20-percent off the sticker price on vehicles under its Buick and GMC brands. Chevrolet also offered similar discounts for MY2014-2015 Cruze, Impala, Camaro and Sonic. According to a Chevy memo to dealers, the offer was for only the oldest 15 percent of dealers’ inventory.

GM also rolled out a dealer-bonus program – from Dec. 2, 2014 to Jan. 2 2015 -- on Silverado and Sierra pickups. The trucks posted a combined 34-percent surge in December to 81,273 units, with Silverado sales pegged at 57,837.

The incentive program grants dealers up to $1,000 per pickup sale for achieving individual sales targets. According to GM, its incentive spending equaled 10.4 percent of its average transaction prices in December. GM saw its overall truck sales -- including pickups, SUVs and vans – jump 32 percent in December.

On the other hand, sales of crossovers and cars leaped 14 percent and 8 percent, respectively. GM said, citing estimates from J.D. Power, that it managed to log its 27th consecutive month of surging average transaction prices, which reached a new high of $36,600 for the month through Dec. 21.

Kurt McNeil, US vice president of sales operations, said in a statement that the surge in sales means that consumers felt good about the direction of the economy.

GM began the 2015 calendar year issuing three new vehicle recalls, one of them covering 83,572 sport-utility vehicles and pickup trucks. The recall involves an ignition lock actuator with an outer diameter exceeding specifications.

GM is expecting that less than 500 units of the recalled vehicle have the defect. Unlike the ignition switch recall, the latest recall over ignition lock actuator is not currently related to crashes or injuries. GM said the latest issue was discovered during an internal review after warranty party returns.

The latest recall covers Chevrolet Silverado, Avalanche, Tahoe and Suburban; GMC Sierra and Yukon and Yukon XL; Cadillac Escalade, Escalade ESV and Escalade EXT – all of which involved 2011 and 2012 model year vehicles. The ignition lock actuator recall also covers same nameplates from the 2007 model year to 2014 model year that have been repaired with defective parts.

The announced recalls also involved to a defective hose clamp in 56 units of 2015 Chevrolet Silverado HD and GMC Sierra HD pickup trucks. The third issue covered 152 units of 2015 Chevrolet Silverado and GMC 1500 pickup trucks, involving concerns the possible that rear axle shaft might fracture while the trucks are being driven.

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