Cox Automotive Analysis: General Motors’ Q3 2022 US Market Performance

Cox Automotive Analysis: General Motors' Q3 2022 US Market Performance

General Motors had a lot of good news in the third quarter. Sales skyrocketed while the industry was flat. GM is back at the top for US sales, winning back its long-held crown from Toyota, which took it in 2021. Transaction prices continued to rise while GM continued to cut incentive spending.

While GM will report higher year-over-year vehicle sales and higher revenues in the US, analysts see weaker performance from GM Financial and GM’s autonomous vehicle unit Cruise, in addition to significantly higher raw material costs.

Whether the good news is enough to offset the bad will become clear when GM releases financial results before the stock market opens on Oct. 25.

The US is GM’s main market. Here is some data from Cox Automotive on the performance of the US Q3 market.

GM’s third-quarter revenue is up 25% year over year, but lagging behind prior years

GM reported third-quarter revenue of 551,976, up 25% from the year before, but still the second-lowest revenue for the quarter in at least six years. In 2017, GM sales totaled 780,835 vehicles.

GM US Sales Performance for Q3 2022

Three of GM’s four divisions posted double-digit sales growth; the fourth – Buick – reported a double-digit decline.

GM’s volume brand Chevrolet had a 30% increase in sales to 369,269 vehicles. A year ago, at the height of the chip shortage, GM stopped producing several models to save chips for SUVs and trucks. Now back in full production, many of those models posted dazzling double, triple and even four-digit sales increases.

The Malibu is back in production, up four digits with 21,630 vehicles sold. Traverse posted a triple digit increase, up 136% to 24,388 vehicles. Other double-digit increases were posted by Blazer, Camaro, Equinox, Spark, Suburban

Chevrolet’s best-selling, highly profitable Silverado fell 5% to 114,963 truck sales. But as major truck buyers considered smaller, more fuel-efficient trucks during these times of high gas prices, sales in Colorado nearly doubled to 24,405 units.

Back in production after a hiatus due to a recall and battery replacement, the Bolt EV had a double-digit sales increase to 3,350 units. The Bolt EUV had a triple digit increase from 11,179 vehicles sold. Electric vehicle sales across the industry were the largest sales gain for the year, up 67% for the third quarter.

GM’s luxury brand Cadillac posted the biggest increase in sales – a 50% increase on sales of 33,672 vehicles. Cadillac had a number of models that were triple digits higher than a year ago, when the chip shortage was most devastating. Escalade – a combination of the standard version and the larger ESV – remained Cadillac’s biggest seller with a total of just under 10,000 units. The XT5 was the second best-selling car with 7,260 vehicles, an increase of 32%. Cadillac XT4, CT4 and CT5 rose triple digits. Cadillac sold 36 Lyriq electric crossovers in the quarter.

GMC sales increased 24% to 120,512 vehicles. The high-volume Sierra was the only model for the brand to drop third-quarter sales from a year ago, down 5% to just over 50,000. Terrain had sold an 81% increase to nearly 18,000. The Yukon and Yukon XL each had double-digit increases, with combined sales of over 21,000 units. GMC sold 411 Hummer EVs this quarter.

Buick’s sales fell 27% to 28,523 vehicles. Sales of the Encore GX fell 41% to 9,825 vehicles. Regular Encore fell 13% to below 3,500. The Envision, imported from China where the government has enforced Covid lockdowns, fell 35% to 7,307 vehicles. Only the Enclave was up, up 4% to 7,904 vehicles, Buick’s second-largest seller.

GM’s total sales outperformed industry by a wide margin, with sales up 25% and an industry flat for the quarter. As a result, GM’s market share rose 3.2 percentage points to 16.2%, according to calculations by Cox Automotive. Most of the profit came from Chevrolet, which had a market share of 2.5 percentage points to 10.8%. GMC had 0.7% gain to 3.5%. Cadillac closed the quarter with 1% market share, up 0.3 percentage points. Buick fell by the same amount for a market share of 0.8%.

Incentive spend drastically reduced in Q3

GM slashed incentives again in Q3. Total incentives fell 55% to an average of $1,353 per vehicle, according to calculations by Cox Automotive. Pre-2021 incentives for the quarter ranged from about $4,700 to $5,500 per vehicle. Industry-wide average pay in the third quarter was $1,079.

GM US Incentive Expenses for Q2 2022

Buick incentives fell the most — down 76% — and were the lowest among GM brands averaging just $964 per vehicle. Before 2021, Buick’s incentives ranged from about $4,000 to $6,200 per vehicle.

GMC had the second largest drop, down 64%, and the second lowest at $1,048 per vehicle. Before the third quarter of 2021, GMC’s incentives ranged from $3,000 to $6,000 per vehicle.

Chevrolet’s incentive spending fell 48% to an average of $1,416 per vehicle when they were $4,500 to $5,100.

Cadillac incentives were reduced by 57% to an average of $2,086 per vehicle, a far cry from the $10,000 plus the brand paid in the third quarter of 2019.

Average transaction prices Edge higher

GM’s average transaction price (ATP) is up 3% to $51,911 according to calculations by Cox Automotive. In comparison, GM’s ATP was $40,053 in Q3 2017.

Chevrolet’s ATP of $48,782 is roughly in line with the industry’s total ATP. The Corvette generates the highest ATP for the brand at over $87,000. The Suburban follows at $73,048, up 8% from a year ago, and Tahoe, up 11%, to $70,032. Despite lower sales, Silverado’s volume pickup had the biggest gain in ATP, up 14% to $60,445. Chevrolet lowered the price of the Bolt, but the Bolt EUV had an ATP of over $40,000. The Spark has the lowest ATP of all Chevrolet models at $17,971.

At Cadillac, the Escalade models generate not only the highest sales volume, but also the highest ATPs. The Escalade ESV had a Q3 ATP of $111,046.5% more than a year ago; the regular Escalade had an ATP of $108,167, up 5%. The CT4 had the biggest increase, up 12% to $53,804. The XT4 is the cheapest Cadillac with an ATP of $45,737. The newly launched electric Lyriq had an ATP of $60,041.

As with Cadillac, GMC’s major utilities deliver the highest revenue and highest ATPs. The Yukon XL had a Q3 ATP of $78,939. The regular Yukon’s ATP was $75,954. The volume-leading Sierra pickup truck had the largest ATP increase, up 13% to nearly $69,878. Other GMC models had small increases in ATP.

At Buick, the Enclave was the only model with higher year-over-year sales, up 6% and the brand’s highest ATP at $53,564. Buick’s lowest ATP was on the Encore at $27,376.

Michelle Krebs is an executive analyst at Cox Automotive.