Pickups, SUVs Give GM's U.S. Sales a Nice Mix Tailwind
We expect robust year-over-year growth in 2021 against a soft comparable followed by more tepid growth in 2022.
Many automakers reported December or fourth quarter sales on Jan. 5 and according to Wards, December sales rose year over year by 6.4% but fell by 5.0% after adjusting for three extra selling days in December 2020 for GM GM. The seasonally adjusted annualized selling rate of 16.27 million lagged Dec. 2019’s 16.81 million. With a COVID-19 vaccine rolling out throughout 2021, we think 2020’s full year total of about 14.46 million is the bottom of this cycle and we expect robust year-over-year growth in 2021 against a soft comparable followed by more tepid growth in 2022. Light truck models remain immensely popular, good news for the Detroit Three, and according to Wards 2020 was the first year that crossovers and SUVs combined for over half (52%) of U.S. new light vehicle sales.
GM’s fourth quarter U.S. vehicle sales rose 4.8% year over year (we calculate a 3.5% rise adjusting for one extra selling day) and for the full year finished down 11.8% to 2.55 million. GM’s deliveries were hurt by continued weak fleet demand especially from rental companies, but retail channel demand looked robust to us, rising 12%. GM’s small business fleet sales rose by 27% and by 5% for the full year. This was GM’s best retail fourth quarter since 2007 and the firm said retail industry sales reached pre-pandemic levels during the quarter. We see potential for good quarterly earnings, scheduled for Feb. 10, due to strong retail demand from GM’s pickups and full size SUVs, which are the most profitable vehicles it sells. This mix shift enabled GM’s fourth quarter average transaction price to reach a fourth quarter record of $41,886. Noteworthy on pricing is that 43% of the new generation Cadillac Escalade SUV’s sales in the quarter sold for over $100,000. Cadillac posted its best fourth quarter retail channel sales and retail share in four years, with the brand’s retail volume up 16% on the new CT4, CT5, and Escalade.
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