General Motors Co posted an annual sales gain of 10.5 percent in September amid evidence that the U.S. auto market remained stuck in a slow-moving recovery at the start of the fourth quarter.
GM was the first of the major U.S. automakers to report sales for the month.
Analysts and industry executives expect auto sales near 11.5 million vehicles on an annualized basis in September, almost flat from August after adjusting for the typical early fall slowdown.
GM said it expected industry-wide sales had fallen to a range of about 970,000 to 980,000 vehicles in September compared with sales of over 997,000 in August.
“Consumers are sending a very clear message that they will be cautious with their spending,” GM sales chief Don Johnson told reporters and analysts.
Despite the still-slack demand for new cars that analysts link to consumer concerns about weak housing and new hiring, GM said there were positive developments in its September sales.
The sales results were one of the last snapshots in demand that investors will see for the top US automaker before an initial public offering expected in November.
Johnson and other GM executives said the automaker was heading into the fourth quarter with a much higher share of new models than it had held a year earlier, reducing the pressure for incentives.
GM spent about $3,300 in incentives per vehicle on average to close sales in September. That represented a discount of about 10.7 percent of the average cost – in line with the industry’s average.
Johnson said GM would remain disciplined in pricing and avoid the temptation to rely on more aggressive discounts to drive sales volumes.
“It’s the economic recovery that has to drive our sales,” he said. “Is it slower than everyone would like? Potentially,” Johnson said.
GM was restructured in a bankruptcy funded by the Obama administration and the government is counting on an IPO to reduce its nearly 61 percent stake in the automaker.
For September, GM posted a year-on-year sales gain of 22 percent in the four brands that it opted to keep while in bankruptcy: Chevrolet, Buick, GMC and Cadillac.
Retail sales accounted for about 75 percent of GM’s sales, with the remainder to fleet operators led by car rental agencies. It has also gained retail share every month this year, executives said.
Industry-wide sales for September face an unusually easy comparison to 2009 when the auto sales rate was an anemic 9.2 million vehicles.
That exceptionally weak sales rate represented what analysts called a “hangover” from the expiration of the US government’s popular cash-for-clunkers sales incentives a month earlier.
For that reason, many analysts will look at the comparison between September and August sales rates for a better sense of the trend.