Despite Recall Headlines, GM Sales Remain Strong (For Now)

April 21, 2014

General Motors' PR team has been working overtime the past couple of months, trying to minimize the damage caused by countless recall-related headlines. The good news -- for GM, at least -- is that the team's efforts appear to be paying off: speaking to AutoNews at the Beijing Auto Show, GM President Dan Ammann says that the recalls have had no "measurable impact" on the company's sales.

For now, Ammann appears to be right. All told, GM sold 256,047 Buick, Cadillac, Chevrolet, and GMC vehicles in March, which is about 4.1 percent better than March of 2013. It's true that for the first quarter of 2014, GM's sales were off about 2.3 percent compared to Q1 of 2014, but that's entirely attributable to poor pickup sales, which were down 5.9 percent. Ironically, cars -- which have been the subject of the "Switchgate" recalls, not trucks -- are up 3.4 percent for the year.

What's more, GM is still outpacing many of its competitors. Ford's first-quarter sales, for example, were off a slightly bigger 2.8 percent, as the automaker lost ground on both the car and truck fronts. Honda was down 3.6 percent, Hyundai was off 2.6 percent, and Volkswagen sales rang in a very hefty 11.1 percent below Q1 of last year.

The news for GM isn't all good, though.

For starters, news of GM's recall fiasco only broke about two months ago, and the stuff didn't really start hitting the fan until mid-March, when it was revealed that the automaker knew about its flawed ignition switches in 2001, years before the first batch of recalled vehicles even went on sale. In other words, as with the somewhat-similar Toyota recall of 2010, it may take a while for the bad press to begin affecting GM's sales.

Perhaps more troublesome, GM has been losing market share in the U.S. for well over a decade. In 2004, the automaker owned more than 25 percent of the American auto market. For the first quarter of 2014, that figure totaled 17.4 -- more than half a point below the 18 percent figure that GM claimed for Q1 of 2013.

Will GM sales eventually slump? And if they do, can the decline be pinned on bad publicity, or is it part of a larger trend of GM losing market share to competitors like Chrysler, whose sales and market share are both up substantially for the year? Whether you've been a faithful GM shopper, detractor, or middle-of-the-roader, share your thoughts on the company's future in the comments below. 


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