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Cruze sales drop but not GM’s optimism

May 6, 2012
By LARRY RINGLER - Special to the Salem News , Salem News

Three fewer selling days and comparison with unusually strong sales a year ago made Chevrolet Cruze sales look weaker than normal in April, but General Motors officials focused on the upside for the Lordstown-built car.

''We've positioned the Cruze as an incredible value. As some of the Japanese have come into the market, we've remained extremely disciplined,'' Chevrolet Vice President of Sales Alan Batey said last Tuesday on a conference call to discuss GM sales, including the Cruze's 27.6 percent sales decline in April from the 2011 month.

GM delivered 18,205 of the premium small cars to dealers versus 25,160 in April 2011, the car's best-ever sales month. The latest April had 24 selling days to 27 a year ago.

Overall, GM sales dipped 8 percent from the strong April 2011 to 213,387. Chrysler sales jumped 20 percent, while Toyota posted a 12 percent gain as it boosted its market share to levels it hasn't seen since before the March 2011 earthquake in Japan. Its sales outpaced the industry as a whole, which saw growth of 2.3 percent last month, according to Autodata Corp.

Cruze's April performance left it the nation's 17th most popular so far this year with 75,288 sales, flat with last year.

Chief rivals Honda Civic and Toyota Corolla were fifth and eight, respectively, with 101,592 and 93,232 sales.

GM executives said they're watching buyers' willingness to pay for Cruze's blend of upscale interior and comfort with good gasoline mileage and performance.

Batey said the Cruze commanded an average transaction price of $19,572 compared to $16,917 for the Corolla. ''That shows we're not getting into discounted sales,'' Batey said.

Don Johnson, GM's sales vice president, said the company is pleased with the Cruze's showing when matched with small car Chevrolet siblings Sonic and Malibu.

''Chevy had its second best retail car sales since Cash for Clunkers,'' he said, referring to the government-led program in 2009 that paid people to turn in older vehicles and buy new ones.

Batey called the compact segment ''the most important segment in the car market.''

Jim Graham, president of United Auto Workers Local 1112 at the Lordstown East assembly plant, said monthly fluctuations in sales are expected.

"As long we're in the 18, 19, 20,000 area, those are good sales numbers," he said.

Chevrolet has sold 75,288 Cruzes so far this year, flat with the same period of 2011.

The Lordstown plant built 24,771 Cruzes in April, running its year-to-date total to 100,919 and model year total to 239,722.

Graham said production is "very stable on three shifts. We don't expect that to change."

Toyota's resurgence could mean better deals as rivals fight for customers by offering discounts and promotions. Already, Toyota has announced zero-percent financing and other deals in May. It also means better selection for buyers. Toyota's factories are cranking out popular models missing from showrooms last year when the earthquake disrupted production.

Jeff Schuster, senior vice president of forecasting for the LMC Automotive consulting firm, said pent-up demand for new cars is driving sales, as the average age of vehicles on U.S. roads approaches a record 11 years. That demand continues even after a strong February and March.

"We're in a more pronounced recovery here," he said. GM now expects U.S. industry-wide sales of 14 million to 14.5 million this year. That's still lower than the peak of 17 million in 2005, but better than the 2009 downturn, when 10.6 million new vehicles were sold.



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