GM July Sales Tumble 15%, Inventory Overhang Still Huge

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General Motors Co. (NYSE: GM) on Tuesday posted total July U.S. sales of 226,107 vehicles, a decrease of 15.4% compared with July 2016. Retail deliveries fell 14.4% in the month to 202,220 million units, and fleet deliveries dipped 0.9 percentage points for the calendar year to account for 18.6% of total calendar year sales.

GM’s new vehicle sales for July were forecast at 243,000 by analysts at Kelley Blue Book (KBB). The analysts also estimated an average transaction price of $39,274, up 0.4% month over month but down 2.3% year over year. KBB does not include applied consumer incentives to its calculation.

The company said June’s average transaction price was about $36,000, up nearly $400 per vehicle compared to June’s average. The company also said that July incentive spending as reported by J.D. Power averaged 11.5% of the company’s average transaction price for the month.

GM’s U.S. vice-president of sales, Kurt McNeil, noted:

We have strategically decided to reduce car production rather than increase incentive spending or dump vehicles into daily rental fleets, like some of our competitors. We are working hard to protect the residual values of our new products and growing quality retail and commercial sales, and July’s [average transaction prices] reflect that discipline.

July sales of the company’s top-selling Silverado pickup fell by 15.1% year over year to 45,966 units, while GMC Sierra sales tumbled 11% to 19,963 units.

Sales of the Colorado midsize pickup rose 21.9% to 11,206 units, and the comparable GMC Canyon saw a decline of 21.8% to 2,761 units.

Cadillac brand retail sales tumbled 21.7% in July, following a 12% decrease in June. Cadillac sales totaled 11,227 units in July.

Total Chevrolet deliveries in July decreased by 15.3% year over year to 151,502 units, with retail sales falling by 14.1% to 132,533 units.

The company’s Buick brand saw a year-over-year sales decline of 30.5% in July, including a decrease of 23.4% in retail sales. The new Buick Envision aside, every other Buick posted lower year-over-year sales.

For the auto industry as a whole, GM’s forecast for the seasonally adjusted annual rate (SAAR) of sales is 16.9 million for July, up from last month’s estimate of 16.6 million.

GM reported 939,831 units in inventory at the end of July, down by 40,623 from the total at the end of June. That represents a 104-day supply, down from 105 at the end of July.

GM’s stock traded down about 3.5% Tuesday morning, at $34.72 in a 52-week range of $29.82 to $38.55. The 12-month consensus price target on the stock is $38.91.