General Motors (NYSE: GM) said today that it delivered 665,192 vehicles in the third quarter of 2020, a decrease in total vehicle sales of about -10% compared to a year ago. GM’s mid-size SUVs beat the industry, including the Chevrolet Blazer up 45%– the best quarter ever – and the Cadillac XT6, also up 45% compared to the Q3 of last year. Buick’s compact SUV, the Chinese-built Envision, was up 44%.
Even with tight inventory caused by the U.S.’s failed Covid response that is still hobbling the economy, GM’s large pickup trucks sold well, mainly heavy-duty pickups. The Chevrolet Silverado HD was up 9% and GMC Sierra HD was up 11% compared to a year ago. Total Sierra sales posted its best third quarter ever. Year to date, GM’s combined light- and heavy-duty pickups gained 1.6 percentage points in retail market share to capture 37.5% of the segment, according to J.D. Power.
GM tried to spin the weak Q3 as the Seasonally Adjusted Selling Rate – aka SAAR – was ~15.9 million vehicles for the quarter, up about 4 million units from the previous disastrous pandemic quarter. Mention was made of the pent-up demand effect that started at the end of Q1 continuing through Q2 as the economy was mimicking the Great Depression because of the Covid shutdown.
“Super low auto loan interest rates have boosted retail auto sales; yet more strength comes from pandemic-induced demand,” said GM Chief Economist Elaine Buckberg.
Pandemic-Induced Auto Demand
- Consumers see private vehicles as a safe space for both local and long-distance trips, as indicated by surveys from McKinsey & Company and Ipsos.
- Some households that are confident in their finances are likely using savings from foregone vacations, entertainment and restaurant meals toward a new vehicle.
- City residents have increased interest in owning a vehicle as some seek to move to the suburbs and others want to escape the city on weekends. The sharp rebound in housing permits is a positive signal for overall auto demand.
- Higher home construction activity and strong demand for boats and RVs are particularly favorable for heavy-duty pickups.
GM emphasized that “In a sign of a recovering industry, sales improved sequentially each month within the quarter. Industry and GM sales rebounded significantly in September, finishing the month with year-over-year sales increases.
“Industry-wide, dealers are selling a high mix of large pickups as the summer comes to an end. Our strong large pickup and all-new full-size SUV lineups from Chevrolet and GMC are selling extremely fast,” said Kurt McNeil, GM vice president, U.S. Sales Operations. (Er, see AutoInformed on Auto Shoppers Dumping Dealers for Online Buying)
GM said it is trying to make the right mix of vehicles to meet demand. Large pickup and full-size SUV plants are all operating on three shifts and at maximum overtime. Multi-layered Covid-19 safety protocols have been implemented across all of GM’s facilities.
With the growing numbers of Covid infections and deaths to help keep employees safe and restore production to pre-pandemic levels, AutoInformed thinks the industry and the US economy is still weak with no near-term relief in sight as the country remains without a plan to fight the spreading disease.