Top GM exec sees continued strong auto sales in 2016 – USA TODAY
DETROIT — New vehicle sales in the U.S. should remain strong through the second half of 2016 and come close to 2015’s industry record of 17.5 million, says Alan Batey, president of General Motors North America.
Speaking to reporters, Batey said one reason will be pickup truck sales. Historically, 40% of all full-size pickup truck sales happen between Jan. 1 and June 30. The other 60% come in the second half. This bodes well for automakers such as GM, Ford and Fiat Chrysler that depend heavily on pickup trucks for the majority of their North American profits.
Elaborating on his bullish outlook for the next six months, Batey said, “We think the industry will plateau at some time, but everything we see says that into the near future the industry will remain strong.”
Batey said he is fully committed to GM’s strategy of putting retail sales ahead of sales to daily rental fleets. Generally, sales to individual consumers by dealers are more profitable than bulk sales of models that are commonly found in airport rental lots. The latter tend to be predominantly less optional equipment and lower trim levels than what most consumers select in the showroom.
Through the first half of this year, business with rental car companies accounts for slightly more than 10% of GM’s total sales, compared with 21% for Fiat Chrysler and about 15% for Ford.
He added that the average vehicle on U.S. roads is still more than 11 years old, indicating there are many potential customers who will eventually have to replace what they have.
Demand is still so strong that dealers need more inventory of some models, especially hot-selling crossovers.
Batey says Cadillac dealers still don’t have enough inventory of the the CT6 full-size sedan and the XT5 crossover, because the early production from the Spring Hill, Tenn., assembly plant has been slower than expected.
And even though demand for cars is weaker throughout the industry, some are still selling at premiums compared to the models they replaced.
The Camaro is selling for $3,700 more on average than its predecessor, the Malibu for $1,200 more and the new Volt extended-range plug-in is selling for $1,700 more than the first generation of the car.
Pricing for the upcoming Chevrolet Bolt EV will remain at the previously stated level of “about $30,000 after a $7,500 federal tax credit,” even if low gas prices continue to depress consumer demand for hybrids and electric vehicles.
Despite the wave of media attention Tesla Motors has attracted with its proposed late 2017 launch of a $35,000 Model 3, GM is not considering a lower than $30,000 price for the Chevrolet Bolt.
“We think we hit the sweet spot for pricing on the Bolt EV,” Batey said. “We’re pioneering with a vehicle the likes of which people have never before seen. We’re going to have 18 months of real world experience selling it before, and I don’t know when Tesla will launch the Model 3.”