BUSINESS
04/01/2011 11:50 am ET Updated Dec 06, 2017

GM Sales Soar 11.4 Percent In March On Market 'Shift'

DETROIT (By Deepa Seetharaman and Ben Klayman) - General Motors Co. said on Friday that its U.S. sales rose 11.4 percent in March as higher gasoline prices drove demand for smaller, more fuel-efficient vehicles such as the Chevrolet Cruze.

The U.S. automaker said total U.S. sales in March for its four brands rose to 206,621 vehicles from 185,406 last year. Including its four former brands -- Hummer, Pontiac, Saab and Saturn -- GM sales rose 9.6 percent.

Auto sales represent one of the first snapshots every month of U.S. consumer demand, and 34 economists surveyed by Reuters estimated March sales would rise 12 percent on average. Other automakers are scheduled to report March U.S. sales later on Friday.

March is traditionally a stronger sales month than February, but lower incentive spending by GM, Toyota Motor Corp and others likely resulted in a lower growth rate than February's stronger-than-expected 27 percent gain.

GM sales chief Don Johnson said incentives per vehicle on average were $600 to $800 lower last month and the automaker would be prudent and disciplined with its deals going forward.

The expected slower industry growth has raised concerns about the recovery in the U.S. auto market, although U.S. employment on Friday recorded a second straight month of solid gains in March and the jobless rate fell to a two-year low of 8.8 percent, marking a decisive shift in the labor market that should help underpin the economic recovery.

Despite the sales increase, rising oil prices and the resulting pain at the pump could push consumers away from more lucrative light trucks.

Light truck sales, which include pickup trucks and sport utility vehicles, make up a little more than half of U.S. auto sales and account for a disproportionate share of profits at the U.S. automakers because of their higher prices.

Gasoline prices rose more than 3 cents to $3.60 a gallon over the last week, the Energy Department said. The average price of regular gas is 80 cents higher than a year ago as conflict in Libya and rising tensions in the Middle
East have sent the cost of crude oil to above $100 a barrel.

Another focus is the aftermath of the Japanese earthquake and subsequent tsunami last month which caused many supplier plants there to close or cope with power outages.

GM said total U.S. sales for passenger cars rose 15 percent in March, while crossover and pickup truck sales rose 20 percent and 11 percent, respectively.

"Clearly, as the market has shifted, we're much better positioned from a product portfolio to take advantage of it," Johnson said.

GM shares were up 0.2 percent at $31.09 on the New York Stock Exchange on Friday morning.

(Reporting by Ben Klayman and Deepa Seetharaman in Detroit, editing by Matthew Lewis)

Copyright 2010 Thomson Reuters. Click for Restrictions.