Everything Is Sunshine And Smiles Over At General Motors!

Illustration for article titled Everything Is Sunshine And Smiles Over At General Motors!

Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.


1st Gear: Happy Days Are Here Again!

Yesterday’s round of new car sales reports from July was... not outstanding. With a couple of very notable exceptions like Volvo and Mercedes-Benz, most automakers either reported just slight year-over-year gains or drops in new car sales. It is very possible that the new car bonanza we’ve seen over the past few years is slipping.

But! General Motors’ chief economist is optimistic not just about car sales, but the overall health of the economy as well, citing growth and low oil prices. Via Automotive News:

“Compared to anybody else, the U.S. and North America are doing very, very well,” Mustafa Mohatarem told a rapt audience Tuesday at the Center for Automotive Research’s Management Briefing Seminars.

Mohatarem said the current economic recovery has been historically unusual because it’s been much slower and more erratic than normal. That, he said, “leaves you with the impression that something is wrong with the economy. But you drive around … and you see every other establishment with a help wanted sign.”

Mohatarem said that “what’s missing is that nobody’s excited about this economy.”

GM’s sales slipped 1.9 percent in July and is down 4 percent this year to date, but Mohatarem says our eyes should be on the long game.

2nd Gear: What Other Economists Say

Naturally, not everyone is optimistic about the new car market. The Detroit News reports that while the factors that pushed growth are still there, like cheap gas, cheap credit and a strong post-recession overall environment, car sales could be reaching “a natural end.”

“We just think it’s a tougher environment,” said Mark LaNeve, Ford vice president of U.S. marketing, sales and service. “My dad used to say, ‘Trees don’t grow to the sky.’ ”

Some analysts are lowering their full-year forecasts and expect smaller growth potential will lead to bigger discounts to move cars off the lot and maintain market share.

Sean McAlinden, chief economist for the Center for Automotive Research which is hosting its annual Management Briefing Seminars in Michigan, expects U.S. auto sales will set a record 17.7 million sales this year — up from a record 17.47 million in 2015. But he sees reason to be concerned about a significant slowdown that could cut sales by nearly a third in the next few years.

“Seven years of growth in auto sales is coming to an end,” he said.

“We’re resorting to price breaks and other sorts of gimmicks to keep sales at a sort of plateau.”


There are only so many people to buy new cars!

3rd Gear: Volvo Lights It Up

Even if sales will slow down eventually, they sure as hell aren’t right now at Volvo, where the new XC90 generated a 52.3 percent year-over-year sales increase in July. Via Reuters:

Volvo said in statement on its website that strong demand for its new XC90, an SUV that is its first model developed under Geely ownership, helped drive sales to a total 41,681 cars in the month. The XC60 remained its top-selling model.

The Sweden-based carmaker said it grew sales in all major regions, especially in the U.S. market where sales surged 52.3 percent on the previous year.


Good for Volvo. The XC90 is an objectively excellent vehicle. It deserves to be a hit.

4th Gear: Honda Rules

Another winner in July was Honda (and Acura), which saw huge demand for its lineup of crossovers, even though some of them are a bit long in the tooth at this point. The CR-V, due to be replaced next year, remains a strong seller. Via Automotive News:

The automaker sold 152,799 vehicles in July for its Honda and Acura divisions. It also set a record for monthly light-truck sales, with 77,729 units sold, a 12 percent gain over July 2015.

American Honda’s gains come as rivals like Toyota, GM and Ford all posted slight declines, raising concerns that the industry is plateauing after six consecutive years of increases.

Sales at the Honda division were up 5.9 percent to 139,125total vehicles. This gain was almost entirely on the strength of the brand’s light trucks, which broke their own record with 68,507 units sold, a jump of 14 percent over last July.

The Honda CR-V, an aging model which is expected to be replaced next year, set an all-time monthly record with 36,017 vehicles sold, a 13 percent increase over July 2015. The smaller HR-V was up 25 percent, while sales of the larger Pilot rose 8 percent.


5th Gear: Toyota Delays The Plug-In Prius, Not That Anyone Would Buy It

Technologically speaking, the upcoming plug-in hybrid Prius Prime looks to be an incredibly impressive vehicle, though I suspect the experience of driving it is about as thrilling as binge-watching C-SPAN.


Problem is, nobody in America is buying the new, non-plug-in Prius. Gas is cheap and consumers have moved on to small crossovers instead. Though Toyota won’t say why, the automaker is now delaying the release of the Prius Prime from fall to winter. Via Reuters:

Previously, Toyota had said that it would begin sales of the plug-in version in Japan in autumn, and that the model would become available in North America and Europe around late autumn.

Sales of the standard version of the fourth-generation Prius, the forefather of the “eco car”, have been sluggish in the United States since it went on sale around February, as low gasoline prices have ramped up demand for gas-guzzling SUVs and pick-up trucks.


This is interesting, though:

Meanwhile, it has been the best-selling model in Japan since the start of the year.


Gas is more than $4 a gallon in Japan right now. Good times.


Reverse: Elon’s A Fan


Neutral: When Will New Car Sales Really Start To Drop Off?

I think we’re seeing an end to the streak. So when does the hit really happen? End of this year? Next year?

Editor-in-Chief @ Jalopnik, 2015-2019.


Common Knowledge isn't

1st Gear: Happy Days Are Here Again!

Patrick - you received the GM sales numbers press release - why do you slant their sales decrease as a negative, when their retail sales are growing - only rental fleet sales are dropping, as GM has been purposely reducing rental fleet sales due to the lower profit per vehicle?

It certainly seems to be a wise strategy when you look at their profits for Q2. From the Press release that I’m sure you read:

GM’s Gains One Percentage Point of Retail Share in July, driving Share to Highest Level Since December 2011•

Chevrolet continues as fastest growing full-line brand•

GM retail sales grows 5 percent, continues as fastest growing full-line manufacturer•

Chevrolet, GMC, Buick, and Cadillac July retail sales up 3 percent, 10 percent, 13 percent and 1 percent, respectively•

Less profitable daily rental deliveries down 10,160 vehicles or 42 percent in July, as planned

I don’t really understand why this is not what your post shows - is it somehow advantageous to you to make a negative slant on what is positive GM news?