Two Takeaways From GM’s November Sales Bump
General Motors (NYSE:GM) reversed its sales trend for 2016 in November, with the company posting a 10.2% increase in year-over-year sales growth for the month. In the year 2016, over the January to October period, all GM brands except Buick had seen their sales decline. Even Buick, which comprises less than 8% of the company’s overall new vehicle sales, had seen its units sold increase by just 1.9%. In November, the company saw sales of GMC, Buick and Cadillac increase in double digit rates. GMC sales were boosted by a 14.4% growth in the sales of the pick-up truck Sierra. Buick sales were boosted by an over 40% increase in the sales of the SUV Encore. Cadillac sales were boosted by its SUVs and the sedan XTS.
There are two important points to note about GM’s November sales. The boost was partly the result of high incentives offered by the company. Incentives for the month were close to $4,300 on average per unit sold or around 13.7% of the average transaction price. This is much higher than the industry average. However, the company’s average transaction prices are also much higher than industry average, which it gives it much more leeway than competitors to use discounts and incentives in order to spur sales growth.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for General Motors
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