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Cruze best seller among GM cars this quarter

April 3, 2011

WARREN - The Chevrolet Cruze continued in March to live up to its hype as not only a savior of the Mahoning Valley's economy but of post-bankruptcy General Motors Co.

Fueled by 18,018 shipments to dealers last month, the Lordstown-built upscale compact vehicle surged to the top of the GM car chart in the first quarter of the year at 50,205, the automaker said Friday.

The total paled next to the 92,445 sales posted by Chevy's Silverado 1500 pickup truck, but it returned the Lordstown Complex to its glory days of producing GM's top-selling car after years of trailing the fullsize Chevrolet Impala and midsize Chevrolet Malibu.

The Impala was a close second in sales for the quarter at 49,541, while the Malibu was third at 48,745, but the Cruze is expected to be Chevy's top seller by year's end, Don Johnson, GM's vice president of U.S. sales, said on a conference call.

Perhaps more importantly for GM and Lordstown, the Cruze is doing things that its predecessor Cobalt and Cavalier couldn't do - attract buyers who don't normally drive GM, and get them to pay more.

About half of Cruze sales in March were "conquest" sales - luring buyers from competing models, such as perennial segment leaders Toyota Corolla and Honda Civic, GM said.

"The Cruze is helping us keep customers and bring in new ones," Johnson said.

The Cruze also sold better than the Cobalt in California and other states where GM normally finds it hard to win small-car buyers, Chevrolet Vice President of Sales and Service Alan Batey said.

In addition, Cruze sales came at an average transaction price close to $19,000, which was $2,000 above the Civic and $3,000 above the Corolla, Batey said.

"That tells you customers are putting more options in the vehicle," Johnson said.

The Cruze's average price also was about $4,000 more than the Cobalt, he added.

A higher average transaction price helps GM make a profit on the Cruze, something it couldn't do consistently with the Cobalt and Cavalier.

Another plus for the Cruze in March was its high level of retail sales versus fleet sales, the latter to car rental companies and other volume buyers that pay less per car, cutting GM's profits.

Batey said only 2,477 Cruze sales in March were to fleet customers, leaving 15,541 for retail buyers.

By comparison, 13,491 Impala sales went to fleet buyers and 4,572 to retail customers.

Johnson credited the Cruze for helping GM double its share to 11.4 percent from 5.7 percent of the compact car market, which he called the fastest-growing segment.

"With oil hovering around $105 (a barrel,) we see a bit of a shift to compact cars," he said, adding the higher oil price isn't causing customers to delay purchases. "We think the economy will stay on its current course of slow, steady recovery."

The Lordstown Complex, which launched the Cruze Sept. 8 as GM's brightest hope after its exit from Chapter 11 bankruptcy in 2009, in March hit a new production high for the car of 26,353 units. It built 22,618 in February and 22,314 in January.

First-quarter production reached 71,285, while model-year production rose to 137,588.

The Cruze supply stands at 73 days at the current daily sales rate, including vehicles in transit, Batey said.

He declined to speculate on what impact introductions of the new Ford Focus and Honda Civic small cars might have on Cruze sales, but he said, "We're not fearing anyone."



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