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General Motors' Management Presents at August 2013 U.S. Vehicle Sales Conference (Transcript)
Seeking Alpha (Transcripts) – Wed, Sep 4, 2013 4:11 PM EDT
General Motors Company (GM) August 2013 U.S. Vehicle Sales Conference Call September 4, 2013 11:00 AM ET
Executives
Jim Cain – Senior Manager, Sales and Executive Communications
Kurt McNeil – U.S. Vice President of Sales
Dave Kanous – Director of Fleet Operations
G. Mustafa Mohatarem – Chief Economist
Alan Batey – Senior Vice President, Global Chevrolet Brand Chief & U.S. Sales and Marketing
Don Johnson – Vice President, Chevrolet Sales and Service
Brian Sweeney – Vice President of Buick GMC, Sales and Service
Analysts
John Murphy – Bank of America Merrill Lynch
Brian Johnson – Barclays Capital
Adam Jonas – Morgan Stanley
Rod Lache – Deutsche Bank
Tom Krisher – Associated Press
Ben Klayman – Reuters
Jeff Bennett – Wall Street Journal
Tim Higgins – Bloomberg News
Melissa Burton – Detroit News
Nathan Bomey – Detroit Free Press
Ted Reed – The Street
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company August 2013 U.S. Sales Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we’ll conduct a question-and-answer session (Operator Instructions). As a reminder, this conference is being recorded, Wednesday, September 4, 2013.
I would now like to turn the conference over to Jim Cain, General Motors Communications. Please go ahead.
Jim Cain
Good morning and welcome to the call everybody. We’re going to follow our usual format today. We’ll have a brief presentation from Kurt McNeil, who is our US Vice President of Sales Operations and then we’ll take your questions and we have representatives from all of our brands as well as our commercial fleet team here and our Chief Economist, so whatever is on your mind we will be happy to address it. The last thing as always, our conversation today is governed by our disclosure on forward-looking statements.
So with that said, Kurt, the call is yours.
Kurt McNeil
Thank you, Jim. Good morning everyone and thank you for joining us Today, General Motors is announcing August sales of 275,847 vehicles in the U.S. this is our highest sales total of the year compared to last August we are up 22% on a retail basis. Our fleet sales were down about 8% which reflects the number of factors including a temporary discontinuation of our mid-sized pickups and fewer fleet deliveries on cars like Impala and Malibu, when you net everything out, GM sales were up 15% in total and we expect the Light Vehicle SAAR to fall in a range above 16 million vehicles.
It’s a great month, any time, when you see all four of our brands return to double-digit sales increases on both total and a retail basis. Based on everything that we see the economy is on solid footing, which means the industry should remain strong, heading into the next phase of our aggressive new product cadence.
As we noted in our press release, August was our best sales month since September of 2008 and that was the month that Lehman Brothers failed. We all know what happened after that and how difficult the next few years were for everyone.
But during that time, our designers and our engineers laid the foundation for today’s success. On the product front, what really got the ball rolling was the launch of the Chevrolet Cruze, which went into production at our Lordstown assembly plant almost three years ago to today.
We think the Cruze is emblematic of GM’s progress on many fronts. But simply stated, we’ve replaced a competitive car with a great car that was a much better value and customers really responded.
Over 36 months, we have sold exactly 677,030 Cruzes in the United States and we’ve been able to replicate its success with other global products such as the Spark, the Sonic and more. It’s been a steady upward trajectory for us in many respects. We have won the North American Car of the Year twice, and we have nine products in the 2014 car and truck competition. The 2014 Chevrolet Impala was named the top Sedan in the country by consumer reports.
GM tops the 2013, J.D. Power initial quality study and Chevrolet had five segment awards which is more than any other brand, we entered new segments with the Chevrolet Volt and Spark, the Buick Encore, Buick Verano and the Cadillac ATS, we dramatically improved the resale value of our vehicles. We returned to competitive levels of leasing and we have embarked on a multibillion dollar program to renovate our dealership sales and service facilities at all 50 states.
Truly, if our first Cruze customer would walk into a Chevrolet dealership today, he or she wouldn’t recognize the place. Let’s dig into our August results and you can see that our transformed line-up of cars, trucks and crossovers is performing very well. For example Cadillac, GMC, Buick and Chevrolet all posted double-digit total and retail sales increases. Buick posted its best August on a retail basis in 10 years and Cadillac had its best retail August since 1989.
Full-sized pickup sales were up 15% in total and 16% of retail, large pickup sales to small business customers were up a robust 83% and large van sales were up 55%, which is a positive economic indicator. Crossovers were up 34% in total and 28% in retail and cars were up 8% in total and 27% at retail.
Several nameplates had their best August ever, including the GMC Terrain, Buick Enclave and the Cadillac SRX. In addition, the Buick Encore and Verano, the Cadillac XTS and the Chevrolet Spark, Sonic, Equinox and Volt had their best months ever.
We also saw a very large retail increases for the Chevrolet Malibu and Impala, which were up 93% and 76% respectively. And in fact, August marked the best retail sales month for today’s Malibu since we launched the car that strong across the board. And with so much customer interest in our products and favorable buying conditions, incentives were down slightly from July on both the percent of ATP on an absolute basis. The strong summer selling season has also paved the way for a smooth transition to the 2014 model year.
In particular, we are very happy to report that the 2014 pickup launch continues to go very smoothly. All three light duty body styles are now in production. So are our V6 and 5.3 liter V8 engines. In this fall, we’ll launch the 6.2 liter V8 Powertrain. We remain very much on track to deliver the plan for the calendar year that we outlined several months ago, which is for about half of our large pickup production and about 1.25 of our sales to be 2014 models.
The next major truck milestones for us occur later this month, when we will unveil the next-generation of our Chevrolet and GMC large SUVs in our next new heavy duty pickups, all of them go into production in the first quarter of next year. So as you can see, the next several months are going to be very busy and an exciting time for us.
With that said, it’s now time for the Q&A portion of our call. Joining us are Alan Batey, Senior Vice President of Global Chevrolet, a North America Sales and Service and Marketing; Don Johnson, Vice President of Chevrolet Sales and Service; Brian Sweeney, Vice President of Buick GMC, Sales and Service; Dave Kanous, Director of Fleet Operations, who is representing our Fleet & Commercial Sales team; and our Chief Economist, Mustafa Mohatarem.
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