News Column

Cruze Sets Sales Record 3 Months Running

August 2, 2013
chevy cruze
Chevrolet Cruze (photo: GM)

The Lordstown-built Chevrolet Cruze continued to set records in July when 25,447 units were sold, General Motors Co. reported Thursday.

GM also announced that the previously scheduled Lordstown assembly down week of Aug. 26 has been canceled, according to a posting on the UAW Local 1112 website.

"We will be producing Chevy Cruzes as normal during that week. There will be no downtime in August," the posting said. UAW 1112 is one of two locals representing workers at the Lordstown complex. GM officials could not be reached to comment on the posting.

The 70 percent year-over-year increase was the best July sales month on record, set just one month after the Cruze posted an all-time record in June when 32,871 were sold. Before that, the model had its best May sales month.

Auto sales continue to be an economic bright spot, lifted by pent-up demand and consumers who feel the economy is strengthening.

Overall, GM said it sold 234,071 vehicles in the U.S. last month, up 16 percent from a year earlier. Most of that gain came from retail sales, which increased 23 percent, as fleet sales dropped by 6 percent.

"For GM, July was the most well-balanced month of the year from a retail-sales standpoint; trucks were hot, but so were small cars and family vehicles," said Kurt McNeil, vice president of U.S. sales operations.

Last month's Cruze sales seemed to reaffirm the company's decision to delay the launch of the next-generation Cruze by one year, as GM plans on engineering changes and hopes to squeeze more sales from the small car before a redesign.

Jesse Toprak, an analyst at the automotive information website TrueCar.com, said the recent sales figures "certainly make coming out with a new Cruze less of an urgency," but he added that a redesign will be key to the model's long-term success. After this year, the Cruze will be the oldest model in GM's lineup without one.

"GM's push to introduce a wide array of new vehicles over the past 12 months is paying off in strong retail sales and growing market share," said Karl Brauer, senior analyst at Kelley Blue Book. "Beyond just new product, GM is introducing highly competitive models in nearly every category, driving growth in retail sales as it puts pressure on the competition."

All four of the company's brands posted double-digit increases, and Buick retail sales have increased for 15 consecutive months. Full-size pickup deliveries were up 51 percent, and crossover sales increased 18 percent.

GM passenger-car sales were up 24 percent, including a 42 percent increase in mini-, small- and compact-car deliveries.

Toprak said the Cruze continues to be in "sort of the sweet spot of the winning formula in the small-car segment," adding that its design and value proposition make it a leader among consumers searching for a small car.

Incentives such as rebates and low-interest loans helped GM and other automakers last month. The company averaged about $3,747, or 22 percent more, in incentives than it did last year, according to TrueCar.com. Incentive spending for the Cruze has increased by about $1,000 this year.

Across the industry, incentives rose nearly 8 percent over a year ago to $2,684 per vehicle. That's the highest level of the year, Toprak said.

Overall, though, the discounts haven't cut prices. The average sale price of a vehicle last month held steady at just over $31,000. That's because buyers are loading up on options, which boosts the price.

A combination of low interest rates, an improving economy, slowly rising consumer confidence and increasing home values in many areas is driving auto sales.

"We're almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond," said Alec Gutierrez, senior market analyst for Kelley Blue Book.

Toprak said TrueCar has adjusted its annual forecast, and it now estimates that 15.7 million vehicles will be sold this year. The number is expected to increase to about 16.5 million next year and hit 17 million in 2015 before pent-up demand softens and sales level off, he said.

Ford, Chrysler and Nissan each reported an 11 percent increase in sales for last month. Chrysler said it sold more than 140,000 vehicles, while Ford reported nearly 194,000 sold.

At Nissan, sales rose to just over 109,000, a July record for the company. Honda led all automakers with a 21 percent sales gain, and Toyota reported nearly a 16.5 percent increase. Hyundai reported a 6.4 percent increase in U.S. sales last month.

One exception was Volkswagen, where sales declined by 3.3 percent.

The Associated Press contributed to this story.

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Source: Copyright Vindicator (Youngstown, OH) 2013


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