GM sales gain from shift to smaller vehicles

DETROIT -- A shift toward smaller vehicles is helping General Motors increase sales, in a stark departure from its gas-guzzling past.

GM today reported a 27 percent rise in April sales amid sharp demand for fuel-efficient vehicles such as the Chevrolet Cruze compact. GM's car sales rose 50 percent from a year earlier, while full-sized pickup sales rose just 2 percent.

GM's sales rose despite the second straight month in which the automaker reduced discounts. GM said its incentives fell more than 10 percent from March, or about $400 per vehicle. They were below the industry average as a percentage of transaction price, said Don Johnson, GM's U.S. sales chief.

In addition to rising car sales, crossovers such as the Chevrolet Equinox and GMC Terrain, which offer four-cylinder engines and an alternative to bigger SUVs, were up 28 percent.

"A lot of sales continue to go into the compact car segment as well as the compact crossover segment," Johnson said during a conference call with analysts and reporters. "We feel that we're very well positioned to grow our share in some of these key vehicle segments."

Cruze leads car surge

It's a sharp contrast to the last gasoline-price spike three years ago, when plummeting pickup and SUV sales helped tip GM into bankruptcy. Then, GM lacked a competitive lineup of cars and crossovers to go up against Japanese and other rivals.

Surging demand for the Chevrolet Cruze drove much of the jump in car sales. Dealers sold 25,160 Cruze units, the most since its September launch. Retail sales of 18,470 units nearly tripled the number of Chevrolet Cobalts -- Cruze's predecessor -- that GM sold in April 2010.

Dealer Michael McGuire said the Cruze attracts older, traditional "GM buyers" who are looking to downsize to fuel-efficient vehicles, as well as younger people who have generally stuck to Japanese brands.

"We're finally seeing the Honda Civic buyer. We just took a Civic trade-in over the weekend," said McGuire, principal at McGuire Chevrolet Cadillac, Newton, N.J., which sold 250 new vehicles last year.

Rising gasoline prices also are attracting more buyers to the Equinox -- especially the four-cylinder engine, rather than the optional six-banger, McGuire said. He recently took a call from another dealer who needed a four-cylinder Equinox and was offering a six-cylinder in return.

"I wouldn't do it," McGuire said.

Fleet propels pickups

Pickup sales were propped up by demand from companies and small businesses. Retail pickup sales fell 2 percent while commercial sales rose, Johnson said.

"While we do expect a continued softening in sales of full-sized pickups for personal use, the market for commercial and small-business use will continue to grow as the economy strengthens," Johnson said.

Fleet sales overall rose 31 percent from a year earlier, and represented a third of GM's overall sales. For the first four months of the year, fleets accounted for 26 percent of sales, which is in line with GM's forecast for the full year.

GM's inventory at the end of April stood at 577,000 units, another sign that GM continues to skirt parts shortages stemming from the March 11 earthquake and tsunami in Japan. That's down modestly from 573,900 on April 1, according to the Automotive News Data Center.

"At that level," Johnson said, "we feel like we're in pretty good shape heading into the summer months."