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General Motors Corporation (NYSE:GM)

Global Sales Call

January 5, 2009 2:00 pm ET

Executives

Mike DiGiovanni

Mark LaNeve

Analysts

John Murphy - Merrill Lynch

Rod Lache - Deutsche Bank

Chris Ceraso - Credit Suisse

Patrick Archambault - Goldman Sachs

Brett Hoselton - KeyBanc

Tom Krisher - The Associated Press

Jeff Green - Bloomberg

Chris Isidore - CNNMoney

Jamie LaReau - Automotive News

Operator

Ladies and Gentlemen, thank you for standing by. Welcome to the GM monthly sales conference call. During the presentation all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions).

As a reminder, this conference is being recorded Monday, January 05, 2009. I would now like to turn the conference over to Mr. Mike DiGiovanni, Executive Director of Global Market and Industry Analysis. Please go ahead sir.

Mike DiGiovanni

Thank you and welcome everyone to GM’s December sales call. Joining me is Mark LaNeve, GMNA Vice President of sales, Service, and Marketing. As is customary, I will lead off with an overview of the industry in the market and Mark will follow with his review of our brand performances. Then we'll open-up the lines for questions, first from our analysts, then from the media. So, with that let’s begin. I've got a little bit more than normal to cover, because it is the year end and I want to put the December sales and the year end sales in perspective.

General Motors delivered 221, 983 units in December, which is down about 31% from December of last year. We estimate that the industry is going to come in somewhere down between 35% to 36% at a seasonally adjusted annual rate of approximately 10.6 million, may be 10.5 million. It’s right on the edge between the two. This, if it comes in at 10.6, it's slightly above November.

So, I would say in general, this seasonally adjusted annual rate has exceeded most analyst's expectations a lot of whom were down. And again this is total vehicle, so on a light vehicle basis, it'll be about 300,000 units less, but lot of the analyst's had the industry coming in below 10 million on a light vehicle basis. General motors -- we estimate a market share this month will be about 24.2%. That’s up about four share points from November, so relatively strong for us in a struggling industry.

As we dissect behind the numbers, and Mark’s going to get to a lot -- into a lot more detail on car line detail, but basically these December numbers are up 43% in terms of unit volume over November and up 30% in terms of unit volume over October, so much stronger month for General Motors overall.

Looking at where we’re going to end this year in terms of inventory, we’re going to be at about 872,000 units, which was down about 36,000 units from last year. I think the big story here is that last year 60% of our inventory was traditional, mid and full size trucks. That’s going to be, we estimate at about 35% this year as we head into 2009 with 25% drop in mix of our traditional trucks which positions us much better than where we were in terms of truck mix as we headed into 2008 last year.

As we put in perspective the year, General Motors delivered 2,980,688 units in ’08, down about 22.9% from '07. We estimate the industry is going to come in down about 18% year-over-year at 13.5 million in total sales. This is going to put General Motors market share above 22%, probably around 22.1%. I think significantly though, and I’m sure you are all aware of what General Motors has been through this year.

Not only have we faced the same challenges that the entire industry has faced in terms of the global credit crisis, two oil shocks, up and down, the housing crisis, unemployment, which has really [rocked] the consumer confidence.

In addition to that, when we look back on 2008, it was a difficult year because General Motors also faced a very long American Axle strike in the spring, two supply disruptions at our hot-selling Malibu plant in our mid-crossovers. We also faced a lot of negative press over the last several months, in terms of the bridge loan, 24/7 among the media in terms of that whole issue, and most recently GMAC effectively being out of the auto-lending business.

So, despite all those challenges, we look back at being over 22%, it's pretty remarkable, and we are going to about 5.6 share points above our number two competitor this year which is Toyota. To put that in perspective, if you go back the last 12, 13 years, our average increase in market share of our nearest competitor has been just over 6%, about 6.2% or so.

In terms of our lead over, our number two competitor in all those years of which Ford was the leader, was number two in the earlier years and Toyota more recently. We've maintained a sizable lead over our number two competitor at 5.6 share points, that's 760,000 units. We exceeded Toyota in US market in 2008, which is equal to about three assembly plants.

So, despite some of the things that came out in the discussions with Congress about Americans not wanting to buy American vehicles, I would say this data pretty much put that to rest.

Switching gears a little bit here back to December because of low energy prices we did see a swing back to traditional trucks and crossovers away from cars. Cars were down about 2 share points this month in terms of retail mix December over. Similar pattern to what we had at General Motors where our crossovers were up a couple of percentage points. One of the interesting things that we saw the run rate in December for our large pickups was 18% higher than in November, and large SUVs and large deluxe SUVs was up 68% in December over November.

So clearly, we are seeing a pattern where with lower energy prices and with some of the credit challenges for people buying at the lower end of the market, we are starting to see a swing back somewhat to traditional trucks and crossovers. I would say overall the shares now between cars, trucks and cars are above where they were at the beginning of 2008.

As we look back and get prepared to go into 2009, I want to give you some perspective on where we think the economy is going and where we think the industry is going. First of all, we are very cognizant of the difficult challenges the industry faces, and in our viability plan that we submitted to Congress, we indicated a 12 million total vehicle baseline forecast in that viability plan, which was dated December 2, with a downside forecast in 2009 at 10.5 million units.

We are in the process, as you know, of submitting a second phase or a Phase 2 to the viability plan to Congress, and we will fine tune our forecast as we go forward but I would say the 10.5 to 12 million range is a pretty good range. And we are not going to appreciably change from that range.

We know the challenges that the industry faces, the housing market remains very weak, although the November sales figures do not reflect the sharp drop at mortgage rates that we had after Thanksgiving. So we'll have to see if that, that gives us a boost there, but the manufacturing purchasing index fell to 32.4, the lowest levels since 1980. The stock markets decline is the greatest since the great depression. But the S&P 500 sank 37.1% in 2008.

Consumer confidence sank to a historic low of 38.0% in December and was slightly down the previous month. Although the [UOM] consumer sentiment index did rise slightly, we have a lot of challenges out there with the economy and we are in a recession. But we look at where we are at. We think there is some cause for optimism as we move into 2009 and especially the second half of the year.

In the case of General Motors, some of the challenges we faced. The supply disruption, I mentioned; the GMAC loan capacity issues; some the negative press surrounding the bridge loan, we had to battle through. We think a lot of those things are behind us.

Secondly, as we stressed on this call, we are enthusiastic about six major launches that we are going to have in the US in 2009. That will then greatly boost competitive advantage in addition to the other factors, I just mentioned.

Specifically we are going to be -- these launches are in key segments. We are launching the new Buick LaCrosse in the large mid-car segment. We are in the process of launching the new Camaro, in the regular sports segment, where we have not been in that segment for a number of years. So that will be conquest opportunity for us.

We are launching the new Cadillac, the Mid Lux crossover SRX, which has a tremendous opportunity to be a real bonafide strong player in the Mid Lux crossover market where we think we have not been as strong as you like. The new CTS Wagon will be an exiting compliment to the CTS Sedan, which has been award-winning vehicle. It should attract more of a car-based buyer. We think it's a different market then the SRX is going to attract in a market we have not yet been in. So there's some potential there for conquest sales.

Then finally, our new compact crossover is the Chevrolet Equinox and a GMC compact crossover that is also coming. These are going to be vehicles that are going to get 30 miles per gallon. Clearly, in the heart of where that market is, in terms of fuel-efficient vehicles, it will be among the leaders and we expect that vehicle is going to significantly outperform the current Equinox.

So, as we look back and the challenges we faced in 2008, we look forward to 2009 with some of the new things that are going to hopefully work to our advantage that I mentioned and make us more competitive.

And in closing I would just say that we are optimistic that as the Obama administration comes in. Given that it is the first new administration in eight years, its likely to be a honeymoon period as it always exists with the new administration. There is going to be a lot of excitement generated across the country because of change. People like that.

I think he's coming in at a perfect time. We expect, as you all have probably read, that the other positive working for us is that I only think second half of '09 improves, most likely there's going to be a stimulus package somewhere in the neighborhood of $775 billion. $310 billion of that will be a type of tax cut for individuals and businesses. It is going to be over a two-year program. So it will not be just a shot in the dark. It will have some legs to it, in terms of longevity.

And we also are very optimistic about the incoming treasury secretary and what he's going to do with the half of the [Fed] funds, $350 billion is the second part of that package. We are hoping that a lot of that will be put towards stopping foreclosures, which would mitigate the drop in housing prices, which we clearly need to turn this economy around.

Finally, we have a much different fuel price situation than we had when we're entering the 2008, when oil process were sky rocketing and consumers could see no end in sight.

But in our surveys that gas was going to go $6 a gallon. But fuel price was being at roughly below 2000 -- excuse me $2 a gallon right now that further is like a tax rebate to consumers is a significant boost to their income. And in fact we estimate that in November real personal consumption expenditure gained about 0.6% because largely due to the reduction of energy prices.

So, we know the economies are in a down turn, but we do think as we move into Q1 the drop in GDP probably be slightly over negative 2% which will be better than the 5.5% that’s expected in Q4 of ’08. And we think that we are hoping as we move into second half will resume some modest growth in GDP again in [emerging recessions]. So with that I am going to turn it over to Mark LaNeve.

Mark LaNeve

Thank you, Mickey. Good afternoon, Happy New Year to everybody. I was sitting here listening to Mickey and just checking in his timeline. When he started this job, he sounded like a sales and marketing guy, which he is and now he is starting to sound a lot like [below] as he gets experienced in the job. But anyway, as Mickey said the story again this month primarily much like October and Novembers a weak industry.

Although, we did see some signs obviously as Mike indicated of it, stabilizing I be it at a low rate -- running rate in the mid 10 million unit range with retail down in the mid 8 million unit range. Performance year-over-year for GM in the month of December was significantly better than what we saw in terms of our year-over-year or share performance in October-November, which were very soft months for us.

We were still down 31.4% for the month. That's not a number that I’m going to put in my scrap book, but it was certainly better than the industry, which was off 35.3% for the month. That’s a big decline on an industry basis, and of course that means we gained share for the month. We believe we’ll come in, we’ve got almost everybody in now. We’ll come in about 24.3% of market share, that’s up 1.5 share points from December last year.

Again, a lot of really ugly red numbers out there across the industry with all the major players down big, Toyo’s and Honda down in the 35% range. We believe that they have reported already. And even some of the smaller companies like BMW, Mercedes, Kia, Mazda, Suzuki showing big declines. So again, much like October, November, a lot of very difficult numbers, and certainly the effect was widespread, doesn’t appear anybody was spared from being down significantly year-over-year.

As Mike said, for the year, we ended up down 22.9%. That decline was almost identical retail and total. So the retail was about the exact same year-over-year decline as our fleet with most of the fleet drop-off being in [daily rent], which was down I believe about 117,000, 118,000 units year-over-year.

So, our market share for the year as Mike said, 22.1, and as he also indicated, very encouraging despite some very extraordinary things in the marketplace happening, and with our company, we’re up almost 2 share points in Q3 and Q4 over what we were in the first half of the year. So we’re very encouraged by that, and I think testimony to A, the performance of our dealers and of the launch products that we have such as the Chevy Malibu and Cadillac DTS out in the marketplace.

Our performance, as I get into some divisional summaries, is pretty uniform and we got a very soft market. We tend to see fairly uniform performance across the various parts of the country. We are not having any particular area stick out the way you say Florida and California were a year ago.

Everyone was affected roughly the same. We do have some things on a divisional basis that I think are worth noting. At our Chevrolet brand, Malibu was up 43.6% for the month, a very good -- continued very good performance, was up 39% for the year and the retail total for the year was up 98%, almost a 100% increase on a retail basis, which is the number we really look at for the new Chevy Malibu year-over-year.

Two of the 30 mile per gallon plus vehicles in Chevy channel Cobalt and HHR, while down slightly for the calendar year, gained considerable share, I think they were down 6% roughly in a market that was down 18, again considerable share both for the month of December and for the year. And the all new Traverse is just getting it out there. It sales doubled from its previous best month, which was November up to 5,000 and just starting to really get traction and very good reception from the customers and deals on that class-leading new crossover.

Silverado gained share for the year, a full-sized pickup and when you combine it with Sierra, they did 634,000 units and the first half of the year was tough sledding. If you call on the pickup market, it did firm up in the back half, but 643,000 units for, what we believe would be a 41.7%, almost a 42% market share of the full-sized pickup segment, that’s up well over a point from a year ago despite having all the primary competitors having newer trucks in the market. We still believe we got the best truck and dealers are really not to sell them. We were able to gain share during 2008 with the full-sized pickups. That 634,000 by the way will be the leader in the industry by over 120,000 units from the next, from the number two players.

At our Cadillac brand CTS was up 3.1% for the year, more than that on a retail basis and gained considerable share in the luxury market, which was fairly hard hit by the recession this past year. Escalade [we hadn't talked], while had a strong month with 4620 deliveries and where we had a good second to the year. Escalade was very weak in the first Q1, Q2 really came on strong, started gaining ground in Q3 and really had a great fourth quarter with Cadillac Escalade and I believe we delivered over 300 Hybrid Escalades in the month of December, which is a fairly good number. We continue to run pretty tight base supply on that new Hybrid Escalade.

In the Buick client GMC channel Enclave was 52.7% for the year and 61% retail, excellent performance with the Buick Enclave. Vibe was up 25% for the year, all of it basically retail. Acadia was down slightly 8% but at that level gained considerable share in that highly contested mid-crossover segment continues to be a very strong product for the GMC brand.

At Saturn, Aura was down 1% through the year almost flat, but that means it gained a lot of share and VUE down 3% and selling 82,000 units for the year was another share gainer and I think a real winning product for Saturn for both the brand and our dealers.

As Mike said, inventory, we ended up the year at 872,000 units, that's down 36,000 from a year ago. Full-sized truck inventories at 159,000 is exactly half. Probably to you guys on Wall Street that means down 50% from a year ago. So exactly half and now a full-sized Vue inventory at 50,000 units is down 40%. So we really did a nice job of rebalancing inventory more to market dynamics that we are seeing and getting a full sized truck and utility inventory well under control now.

And importantly our day supply, based on a trailing 30 day [lag]. It really spiked in October, November because the two month were so soft industry wide. We dropped over 50 days off that day supply number going from 167 at the beginning of December to beginning of January at above 117. So we took about 50 days off of it and traditional [buy and operating] trucks are well under 100 days. So the better sales pace that we saw in December albeit its still at a historical low levels have certainly help us to get the inventory situation, along with production costs that we've made under much better control. Still some work to do there.

Another note on inventory, 11% of our inventory as we stated today is past models that means 2008. And now that's a good number. You don't want it to be January 1st, you don't want it to be above 15%. So the 11% will sit pretty good there, a number we are very comfortable with. We did run some pretty strong incentives in ’08, on select ‘08 models where we had inventory in the month of December. We hope the [dealers] get those cleaned up of the floor plan and part of it, we think we [had it even stronger] that we starting running out in '08, in [car types] such as pickups and some of the bigger pickup markets. So our emphasis is clearly now, we will shift in those car lines or well trucks lines to the '09 models.

I am sure I will get questions on GMAC. I getting them back in the game with funding. It’s a good buy it. It is a better spread obviously. It was a boost to the month. I cannot say it affected it greatly. We’ll know a little more, once we start pouring through the contracts here in the next week or two. But we really got that flowing them into the market - it’s within that APR program on select models on December 30th. So while we think certainly enable the dealers to get lot more customers into the game, we are highly encouraged by it and we think -- it will actually have bigger effect in January Q1 then it’s --on a relative basis then it did in December since it’s so late in the month. But sure it felt good to have GMAC back with funding to help us do business on a APR basis.

Our incentive spend was a little bit higher than November, relatively speaking mix effected, because we ran pretty incentives on the ‘08 models that we did have. But our relative spreads to our competition whether we are either at bottom or below them, but we see remained fairly constant from November to December.

So in summing up, I am sure you have a lot of questions ’08, unbelievable year. I cannot say its one I want to repeat, but we are certainly – and we are able to go through it. Hopefully, 2009 will -- so obviously it’s going to start low, because we got December as the jumping off point, but hopefully, as Mike indicated it will be a year that improves rather than deteriorates, even though we start it from a relatively low level.

I can tell you that our fleet numbers in January are going to be very low, just based on some of the plans, I [discussed] with our major daily customers, some tightening in that business, as well as production cuts. So that will probably have some effect on industries. So, I am sure its effecting other manufacturers as well in January and Q1.

But we’re optimistic that year that will at least gradually improve and not see the massive deterioration that we saw on Q3 and Q4 2008.

So with that I will kick it back to Mickey to and I guess we can open up for questions.

Mike DiGiovanni

Thank Mark. Operator that wraps up our prepared remarks, so let's take questions now, thanks.

Question-and-answer Session

Operator

Thank you. Ladies and gentlemen, we will now proceed with the analyst portion of the question-and-answer session. (Operator’s Instructions). One moment please for our first question. And our first question comes from the line of John Murphy of Merrill Lynch. Please proceed with your question.

John Murphy - Merrill Lynch

Good afternoon guys.

Mike DiGiovanni

Good afternoon John.

John Murphy - Merrill Lynch

I was just wondering, as we look at the impact of certain dealers actions, I have seen what you were doing as far as in supervising sales at the corporate level. I was just thinking how the dealers pushed volume this month. Was their any significant push by the dealers, because they were concerned about the GMAC situation and their lack of ability to get four plant financing that was a push in the month that you can tell?

Mark LaNeve

John, not that we know of -- dealers -- their big push lately has just been business, their volume is off to. So, no matter what branch you are speaking, I mean they are -- so they are anxious that they align their inventories where they have imbalances. And they are pushing just to meet payroll in some cases. So, I mean, I do not think worrying or any specific worries about GMAC entered into the thought process.

I think they were delighted obviously that we got back in APR game towards the end of the month and we're able to buy a reasonable spread down to 621 credit score but specifically worried about GMAC not having the ability to form -- I don’t think that entered into the thought process. The dealer's growth on a per unit basis was relatively stable throughout the year and beyond it has been stable for 20 years in GMs case. Now as a percentage of MSRP, it has come down over that time, but it has been relatively stable number in terms of all the numbers we look at.

John Murphy - Merrill Lynch

And then, just may be conversely as we look towards the end of the month and going into January, I mean, GMAC is now stabilized to some extent as far as the flooring goes and that you’re making big production cut. Are you seeing dealers actually may be pull back and try to take price a little bit more? I am just trying to understand that the shifts, and because there are two major shifts here. One in your current production massively in the first quarter and two, GMAC the flooring is a lot more solid for these guys. That they might -- they might shift their behavior on pushing volume quite as much going into January.

Mark LaNeve

No, we are not seeing any evidence for that John. They are pushing hard on volume, given the softness in the market. As I said, we have not seen any evidence that they have gained gross on a per unit basis. It has been relatively stable, but right now just given the softness in the market, the competitiveness of the market, I do not know of any dealers holding gross. I mean they are trying that. Even in a 117 days supply store is little heavier than we like little heavier than they like. So, they are going to be pushing [hard to get it sold if] they can.

John Murphy - Merrill Lynch

And then just lastly, when I look at the schedule you guys have there for the first quarter, basically it looks like you're running ran six plants, two shifts straight time for the quarter out of roughly 22 assembly plants. I mean, would it make sense to just shut those down completely and shutdown production for the first quarter, because you are doing a lot of that clearly in a lot of plants. Or there are really some products that you are just really short of inventory that you actually need to make?

Mark LaNeve

Well in terms of the plants that are running and what’s schedules, I mean, A, we could change those, relatively quick turnaround in terms of if we see any bounce in a particular car line or segment, we can add some of that back in, a fairly reasonable, orderly timeframe.

But I mean where we have in run and we need the production, I mean obviously when you have taken this deeper cuts as we have, we are not feeling shy about trying to get alignment of our inventory to the market, so what our forecast for the industry is at least in the first quarter. But if we are running, I mean most of those are truck plans, it's where we have either give a call for the orders or commercial needs or orders from our partners in that part of the business.

John Murphy - Merrill Lynch

Great. Thank you very much.

Operator

Our next question comes from the line of Rod Lache of Deutsche Bank. Please proceed with your question.

Rod Lache - Deutsche Bank

Good afternoon, guy.

Mike DiGiovanni

Hi, Rod.

Rod Lache - Deutsche Bank

Can you tell us what your retail and your fleet did on a year-over-year basis?

Mike DiGiovanni

Yeah, I actually miss to cover that, I forget. Basically, retail and fleet were down about the same. We ran roughly around 27% of the mark. We do not have all this finalized yet, but for the year roughly about 27% fleet. And that is up slightly from '07. And I would say, in terms of, which is not where we want to be, our daily rent number actually came in the high 400s, so, I mean it was a very, very reasonable number match to the industry size. In fact, we were hoping to do more rental last year, had the economy not going down. So, I mean, everything worked up pretty in balance for the year.

Rod Lache - Deutsche Bank

You are talking about they were down roughly the same for the year. Could you tell us for December what happened to retail and fleet?

Mike DiGiovanni

We ran at a higher rate than that in December. I do not have all the final numbers in here yet, but we were a bit above that.

Rod Lache - Deutsche Bank

You are saying fleet was up in December or was it all?

Mike DiGiovanni

I would say, it ran a little bit higher than about 27.5 or so that we think, it is going to run through the year.

Rod Lache - Deutsche Bank

Okay.

Mike DiGiovanni

Appreciably now a little bit higher.

Rod Lache - Deutsche Bank

Right. It looks like it may have been up a little. Bit I am just wondering there is an article on Automotive News today kind of talking about the daily rental market now challenging it is. Is the composition of your fleet business changing now? What are you seeing in terms of that fleet demand?

Mark LaNeve

I will let Mark answer that. We are seeing a lot of cautiousness on the part of our daily rent partners in terms of how they are managing their inventory length of time that they are keeping their vehicles into their fleet and our rental was off 20% versus calendar year versus '07 for the calendar year which were forecasted, it's going to come down again next year.

We are sure that all the folks that are participating in that business at least they were in it in a big way for the Chrysler, probably forecasting declines as well. We are seeing some of our foreign competition jump heavier into business. Of course, they were running at a low percentage before, but they are starting to take it up, they actually had some, we are getting surprised.

Well, I do not trust the numbers though I see the [oil corp] registrations get pulled through, but we continue to be surprised that aggressive -- some of the Japanese players for example that are jumping into that business. But it is good business for us. As I said, the profitability of the business, we improved it dramatically over the window of 05-06-07. So it is business, so we are out competing for just like retail, but we look forward to continue to be under pressure and probably be down next year.

Rod Lache - Deutsche Bank

Okay. And just one last one. Going forward it looks like you are going to be able to offer some of them through other finance companies. GMAC put that in their filing last week. Its say that is it subject to restrictions. Could you tell us what those restrictions are and is that a meaningful change from a marketing perspective?

Mark LaNeve

Good question Rod. To be honest we are yet to really -- it was all we could do over Christmas to get the program out there we did with GMAC, and my team back here did at work with GMAC. That is a terrific job of giving a quick turnaround. We are pretty proud of the fact that the minute that the GMAC get restructured in to bank holding company we were around the market right away, with what we thought their money was intended to do, which is to stimulate business get it into the hands of consumers essentially.

So what happen right now had that gone, as we begin to assimilate the competitiveness of GMAC overtime at the interest of other financial institutions to get in the business. That is certainly a tool now that we have a bit our disposal to a much greater degree than we have ever had. And like anything, we will try to take complete advantage of it. But GMAC is our partner and as long as we are competitive with them and able to do business, our dealers are used to doing business with them. They are an old [brand] in the marketplace and our customers. I mean we are happy to get back on board in a big way with GMAC.

Rod Lache - Deutsche Bank

Okay. Thank you.

Operator

Our next question comes from the line of Chris Ceraso of Credit Suisse. Please proceed with your question.

Chris Ceraso - Credit Suisse

Hey, thanks. Good afternoon.

Mark LaNeve

Hi, Chris.

Chris Ceraso - Credit Suisse

Maybe we can look at the other side of this question. What was the year-to-year comparison in retail sales for the month of December? Usually you have that with you.

Mark LaNeve

Retail -- I am sorry your question is what was December to December over retail?

Chris Ceraso - Credit Suisse

Retail, yes.

Mark LaNeve

We were down to about 41% at retail.

Chris Ceraso - Credit Suisse

Okay, down 41%, retail. And you said the [fleet] you do not have that compare?

Mark LaNeve

Well, we have got some -- we have a little bit reason we will be able to base our little argument over certain class of vehicles where they are commercial fleet that happens from time-to-time, but the retail decline year-over-year in December was a little higher than the 31%. Fleet was relatively flat. But we are still pouring through some numbers.

Mike DiGiovanni

Yeah, let me, Chris, put this in a better perspective for you. Our retail was down 41%, but the industry as much as we can estimate retail that is a tough number to estimate yet. We do not have all the manufacturers in, but we have enough and that I can probably can give you some guidance.

We think our retail share for December is going to be about 21.4%, which is a good number for us and it is above -- while we have been running of the year -- we are above 20% for the year. We did better relatively speaking in December, about 21.4%, 21.5%, something like that. So, it is coming off a strong December 2007 number. So it is a little bit – you cannot just look at the percent down 47%, you got to look at the share.

Chris Ceraso - Credit Suisse

Okay. Not to beat on this, but do you have a breakdown of the Malibu, that was a, it's been a strong product all year. But just wondering it was up 43%. Is there…?

Mike DiGiovanni

98% of it was up at retail, 40% total.

Chris Ceraso - Credit Suisse

That was just for the month or for the year?

Mike DiGiovanni

For the year 2008, the Malibu was up 98% retail. It was up more than any of the other top 20 selling vehicles in the United States. Its the number one vehicle in terms of top selling models.

Chris Ceraso - Credit Suisse

For the month, that was at 17,000 units. What was the breakdown between fleet and retail there for the Malibu in December?

Mike DiGiovanni

I have to dig that out. Now those were flat retail, Chris.

Chris Ceraso of Credit Suisse

Flat retail was a [big hit for] you.

Mark LaNeve

Year-over-year, yes.

Chris Ceraso of Credit Suisse

Okay. Last one, do you have a feel at all Mark for how many folks you may bring back into the market by now going down to 621 versus the 700 cut off?

Mark LaNeve

Well we think that the number was -- somebody here help me out. It was like 40% of the customers are 700 plus. Potential customers at any given time we think it brings another 30-40% in apply. So, you can almost say it effectively doubles your market opportunity at least in terms of GMAC is concerned and you got to remember, GMAC was not buying anything below 700. The banks never have. I mean, there are independent banks that our dealers were used in that for several months there to try to get business done, and I would say surprisingly successfully saw when you consider that they hadn’t really developed those relationships over a number of years because they are so used to doing business with GMAC. They are pretty risk adverse and so this is a big move for us to get there kind of spread. Certainly, its not subprime, I'm not sure we want to dabble whole lot in that business but these are credit worthy buyers and they probably have to have little more down payments and some other things, but obviously it opens up a much bigger market opportunity for us.

Chris Ceraso of Credit Suisse

Okay, thank you very much.

Mark LaNeve

You are welcome.

Mike DiGiovanni

Thanks Chris.

Operator

Our next question comes from the line of Patrick Archambault of Goldman Sachs. Please proceed with your question.

Patrick Archambault - Goldman Sachs

Hi, guys.

Mike DiGiovanni

Good afternoon.

Patrick Archambault - Goldman Sachs

I just wanted to -- could you give us a sense a little bit, of how the month played out in terms of cadence? Because, I guess if your real big incentive program was only on at the very, very end of December. I suppose the programs you had in place were part of the driver of keeping -- well the driver of the performance, which was obviously a lot better and clearly obviously fleet was too. But, can you tell us how things kind of played out in terms of the beginning versus the end of the month, because there was some pretty negative [FinData] out there, especially after the 10-day surveys.

Mark LaNeve

Hey Patrick, our share performance, as we looked at it in [Fin], and then our performance versus our track -- we have an internal track we've laden -- obviously you’re delivering more at the end of the month than you are at the beginning, so we build that into the way we track our monthly sales. It was pretty -- there was not a big spike at the end. It was just pretty steady through the whole month and if anything, I would have thought we would have closed a little stronger than we did on the last day or so.

Kind of a couple of dynamics going on that are tough to calibrate. For one, a lot of dealers might have closed their books on the 31st, and yet we close the month on the 2nd, and for whatever reason they may have closed on the 31st, and [not putting] any deliveries in on the 2nd because of accounting reasons or LIFO or whatever the case may be.

Our incentive programs actually went until today, which we typically do when the close is on a Friday because of -- there is no way to get the new incentive into the market, get advertising ramped up, get it announced et cetera and so there was no incentive reason for the dealers that report deliveries on Friday. And then you had them all trying to get used to assimilate the GMAC program we announced on the [30].

So you got a couple of dynamics going on that’s -- it's hard to calibrate just how good or bad was the close through the month, but we didn’t really see a major spike. It was just pretty steady performance right around that 155 to 160 retail kind of track the whole month [roll].

Patrick Archambault - Goldman Sachs

And then I guess, related to that, what kind of impact do you think there was just from the specter I guess of bankruptcy if you want to call it that just because clearly the bridge loan wasn’t really saddled until kind of midway through December, and even the White House had said that there were options right that could potentially involve bankruptcy. I mean, was there kind of a noticeable uptick in your sales after that? And maybe a broader question would be, how much do think that has impacted maybe the last couple of months of sales and could that be obviously a potential benefit going forward?

Mike DiGiovanni

As I have said before, certainly it is very hard to quantify. Certainly on the margin, last couple of months of all that kind of discussion, all the events in Washington have not been a help to us. It felt like things got a little better towards the end of the month between the loan guarantees going through, but you know Patrick, we outperformed base well I could see here in total and retail, we outperformed Chrysler by about the same as Ford within a point.

I mean you could slide a piece of paper between our performance year-over-year and that of Toyota and Honda. So I think it’s much more an industry story than it is anything pertaining to General Motors in regards to those kinds of things. The sooner we can get that discussed out of our business, the better off I'm going to be, I mean all of us are going to be, don’t get me wrong. But I don’t think it was a huge factor. Hopefully, it will go away and we won't have to deal with anymore.

Patrick Archambault - Goldman Sachs

Okay, thank you.

Operator

The following question will conclude the analyst portion of the question-and-answer session. And we will proceed to the media portion. (Operator Instructions). And the final analyst question comes from the line of Brett Hoselton of KeyBanc. Please proceed with your question.

Brett Hoselton - KeyBanc

Mark, many Happy New Year.

Mike DiGiovanni

Hi, Brett.

Brett Hoselton – KeyBanc

See I would like to dig in just a little bit deeper into GMAC if I could and I know you guys are going to have the data in front of your sales. Let me ask that's first question. Typically when you look at the retail sales, what percentage of retail sales are financed like GMAC? And then secondly, what percentage of retail sales were financed by GMAC during the months of October and November, obviously it's down significantly? And then towards the end in the month in December following the injection of capital, do you have any sense of what percentage of your renewable sales were financed by GMAC at that time?

Mike DiGiovanni

First couple numbers were easier. For years and years and years we ran somewhere around 40% to 45% of our business was financed through GMAC or leaser APR. And in the months of October and November that number dropped to 2% or 3%, it was basically zero leasing and 2% or 3% APR. I am sure it's a higher number in December that's the number I don't have Brett because that's a trailing numbers as GMAC [pulls through in process of your contracts] because they do have a lag time on that.

Certainly above that 2% or 3% we ran in October, November, I can't even venture and guess, it won't come any more close to approach to 40%. We are not getting in the market, it will be maybe 5%, 6%, 7% somewhere near so maybe double or it was from that very abysmally low level in the October, November. But certainly I think its more a reason why I said earlier, we think the effect of getting GMAC back in the game, which we are delighted about, is going to have much bigger effect on our business in Q1 than it did in December because we got into the game so late in a month.

Brett Hoselton – KeyBanc

Conceptually Mark as you kind of look into the first quarter, do you have any sense as to what your expectation might be in terms of the percentage financed by GMAC in the first quarter? I mean do you think you might get up to a 20% rate or do you think it might actually rebound to a 40% to a 45% rate?

Mark LaNeve

Its tough to say, I could probably do some math and get close to the number because we would assume that -- a lot of it depends on how much we subvention it. If we are to subvention in zero to 72, like we did three years ago, we will do a lot. But that's probably not in the card. We a re going to have some very competitive programs out there, but as we look into January, we are going to -- just like December we're going to a have a couple zero percent. We will have a lot of 29s, 39s, 49 GMAC and I think all finance institutions are looking for more down payment, a better loan-to-value ratios et cetera, even with a higher credit score. So, I don't think we are going to approach historical levels APR and of course we're not really back into leasing yet. So some number over 10%, 15%, in that range I would hope it would be healthy and hopefully result from there.

Brett Hoselton – KeyBanc

And then as you think about incentive activity during the month of December. Before you talk about incentive activity kind of picking up as you move through the back half of December I wasn't sure if that was specifically with regards to rate subvention or something along those lines but from your perspective what did you see in the industry?

Mark LaNeve

Well, in our case the rate subvention had very little do with our incentive spend because we -- when we run a rate it does stack with customer cash. It's a neither/or. Some other incentives do like we are running, say loyalty program or subvention that may stack with related to customer cash, but we basically traded it off in equal amount of customer cash for the rate [advantages]. So that in some cases we were a little bit better, but in most cases fairly neutral for the customer.

Our incentive spend was largely impacted by model mix. We ran pretty aggressive programs on ‘08 pickups, ‘08 utilities to help clear those out at dealer’s lots. Pretty high floor plan goes on those if there were [against] inventory. So that made a lot of sense to us. It gave us good very strong price position versus new pick ups from Ford and Dodge.

And I think our share performance just now has pretty good strategy in that regard. But we saw what we continue to see from the competition, the Japanese are being very aggressive on lease programs. I pulled the sheet the other day, I think Camry right now is $3500 on it, that’s a big number for Camry. So that’s one example. So we continue to see those guys being fairly aggressive as to pricing, as the same things we are, they are chasing the down market and got a lot competition.

Brett Hoselton – KeyBanc

Very good. Thank you very much gentlemen.

Mike DiGiovanni

Welcome.

Operator

Our next question comes from the line of Tom Krisher of The Associated Press. Please go ahead with your question.

Tom Krisher - The Associated Press

Hey Mark and Mickey.

Mike DiGiovanni

Hey Tom

Mark LaNeve

Happy New Year.

Tom Krisher - The Associated Press

Happy New Year to you. I was - I’d like to follow-up on the incentive spending. In the future, given that you got GM -- GMAC back, you got Toyota being pretty aggressive on incentives and then you got kind of some real wacky incentives in the pickup market. Where do you see things going in ‘09 considering the fact that the market is probably going to stay somewhat depressed?

Mark LaNeve

Well, I mean the basic role with incentives Tom is, we need to competitive on a segment-by-segment basis, because a lot of variables go into an unusual product or competitive new product. We have got very competitive products in the marketplace now. So, that's helping us. What you don’t want is to have to spend incentive money there to correct inventory problems. And we've had to do some of that in the past. We had to do a little bit that in December and even though inventory at a nominal level, historically very low, on a day supply level is relatively high because the industry fell of.

And everybody face that with their day supply jump in October, November. So, as we continue to balance up inventory to the mark realities that we're facing, it's a painful stuff with production cuts and other things. Hopefully, we can get rid off any incentives spent. It's directed at inventory issues and now in that your leverage is being price competitive in the market, which we're always going to be. We can't be in a position where we are -- at our volume level we're out there, we're not price competitive.

Tom Krisher - The Associated Press

Okay. So, you -- I guess the, you made the production cuts, you don’t think you will have to do it at all for inventory reduction purposes?

Mark LaNeve

Well, we still got some balancing that were -- you're always -- you're never perfect, especially the 3 million units and the different models and name plates that we have, but certainly, as I said, we're 50% of the inventory from year ago on pick-up trucks and 40% less on full size UTs, so if you are in a lot more optimal inventory situation, at least you don’t have to spend incentives to correct those kinds of problems.

And that’s true [little way]. We're trying to run the business to get that balanced up, and then you just got to be competitive. CAMI’s are competing with Chevi Malibu, so they are out there with that kind of incentive load. We've got to be somewhat price competitive on our new Malibu. So, that’s kind of things we're bound to -- we do that like almost on a daily basis. We're trying to look at that data and then trying to make sure that our products are competitive, at least the high volume products that we're always competitive in marketplace.

Tom Krisher - The Associated Press

Okay, thank you.

Operator

Our next question comes from the line of Jeff Green of Bloomberg. Please proceed with your question.

Jeff Green - Bloomberg

Hey guys, how do you do?

Mark LaNeve

Hi, Jeff.

Jeff Green - Bloomberg

Can you say anything about your incentive change will be as we -- as your stuff expires today, and you go into the rest of the month?

Mark LaNeve

Jeff, we missed the beginning of that.

Jeff Green - Bloomberg

Can you say what your incentive plans are for tomorrow, basically in the rest of the month after the stuff you have out there expires today?

Mark LaNeve

We’re going to continue to have APR program in the market, we may even expand it to a few more models, that both in line up, we'll have some kind of an APR will be in all cases of screening, 0% will be a very competitive rate, 29s, 39s, its 49s which is very competitive rate in the market. Traditionally in January, we run a very successful overloading program. We’re going to have that going on into marketplace, so we'll be out there with a very strong competitive program I believe.

Jeff Green - Bloomberg

Is that the $3,000 per people, 99 or?

Mark LaNeve

It varies depending on the model, not so much on the year.

Jeff Green - Bloomberg

Okay, got you.

Mark LaNeve

If at any time off or I kept getting releases from your (inaudible) don’t you take any time off?

Jeff Green - Bloomberg

Not if I can help it.

Mark LaNeve

May be, you should.

Jeff Green - Bloomberg

Well, if you guys can just stabilize I can take some time off.

Mark LaNeve

Okay, we’re getting there.

Jeff Green - Bloomberg

One more question on the Malibu, fleet number for December. What, did you guys just decide to go, so heavy in the fleet with Malibu or was there something else that happen there?

Mark LaNeve

Largely, the timing of our fleet business is largely customer dependent. We have some ability to work with our fleet customers on timing, but by and large, we try to meet their timing as we’ve taken a lot more price in their market over the last couple of years. One of the things we traded off was dictating timing conditions. So if we're charging more for the fleet units and it’s a very complex set of transactions, it's very complex transactions where that’s all priced in with depending on whether they're marketing the unit as a used vehicle or whether we're taking it back.

They more or less dictate timing, and then obviously with the year end, we were pushing very hard to clear all the yards, get everything out in advance of numerous plans being taken down time in January. So you had a little bit that might have went into January, they actually got into December just because of our desire to really cool down our inventory levels to clear everything out by the end of the year.

Jeff Green - Bloomberg

Okay.

Mike DiGiovanni

But the Malibu, the Malibu number is not on the line with what it's being doing and it actually had a very good retail month and very low incentive level.

Jeff Green - Bloomberg

Okay. Thanks.

Operator

Our next question comes from the line of Chris Isidore of CNNMoney. Please proceed with your question.

Chris Isidore - CNNMoney

Did you start to see any kind of, I mean, your [Saab Total]in light trucks was up a little bit from what it had been earlier in the year, are they still down from a year ago. Do you think that the lower gas prices are starting to help light trucks sales or is it just a matter of incentives being out there by you and other competitors that are trying to be able to pick some in SUVs again.

Mark LaNeve

I will let Mickey take. There is no question that the low gas prices are helping truck sales. I mean, it pretty cut the spigot off on truck sales in the first half and oil hit $147 a barrel. Second thing, relatively speaking some of the large SUV and mid-SUV truck buyers as well as some of the fully loaded full-sized pickup buyers, they tend to be a little bit more resilient in terms of having access to credit than the low end of the market, small compact buyer. They are being squeezed out. So, on a relative basis, we are seeing larger trucks, stronger as a share of the market because of that region.

Mike DiGiovanni

Good. So I want to add in that in the truck categories and most importantly obviously the full-sized pickups, full-sized utilities, we held share or in case of full-sized pickups had a slight share gain, but roughly we firmed up with the industry firming up in the truck categories in the back half of the year. I mean a big focus of ours is improving share, we have believe me a lot of opportunity in some of the key passenger car and crossover categories and almost without exception our launch products over the last year or two gain share in the respective segments in 2002, Malibu or even product like the Chevy Cobalt, HHR, of course the Enclave and Acadia, Outlook, the new Chevy Traverse.

So if we can hold shares, and truck market firms back up with that leading truck position we have which we plan on doing and we can gain share in other segment, that's really our plan is to become more profitable and gain share in the passenger car and crossover segments where we had lost a lot of market position over time. We have maintained a strong truck position all along, it's that part of market we have got bigger opportunity and we have seen a lot of encouraging signs in spite of very weak market.

Chris Isidore - CNNMoney

And if you can clarify one thing that you said to another question, you didn’t seem to see any big pick up in sales or traffic once it became clear in the second half of the month that you would get federal help and avoid bankruptcy that didn’t seem to give you any more list than first half or second half more than appreciably better because of that news.

Mike DiGiovanni

We definitely saw an improvement. I just -- and I cannot quantify exactly how much, but I mean we definitely saw an improvement there. Obviously that the news around the company was much better in the back half of the month than it was at the beginning, so I don’t want to downplay it, it was certainly there. It is tough to quantify and I think that getting the financial distress news out of the system if we can manage to do that it can only help us.

Chris Isidore - CNNMoney

Okay, thanks very much.

Mark LaNeve

Okay.

Operator

Our next question comes from the line of Jamie LaReau of Automotive News. Please proceed with your question.

Jamie LaReau - Automotive News

Hi, Mike. Hi, Mark. Happy New Year.

Mark LaNeve

Hi, Jamie.

Mike DiGiovanni

Happy New Year.

Jamie LaReau - Automotive News

Thank you. I just wondered if you guys could talk about the ’09 sales projection, either for General Motors, for the industry or both. If you could kind of extrapolate a little bit of it and what you expect next year and why?

Mike DiGiovanni

Well, Jamie as I said in my opening remarks, we have submitted a viability plan to Congress on December second and which is a public document. And in that document we had a baseline planning assumption of 12 million industry sales in 2009 and a down side scenario of 10.5.

I think that's a pretty good range to be operating in, in term of planning our business and we're frankly using both numbers. Probably we're going to tend more towards the 12 million in the second half of the year, and in the first of the year we make 10, more towards the 10.5, because we still believe for all the reasons I stated that there were some positives from the Obama fiscal stimulus packing face toward the TARP et cetera and ourselves personally getting back in to game with GMAC and some of the negative talk behind this that occupy the air waves in November and December.

So we think there is still upside. But we will probably fine-tune that number over the next month and a half, because we have to submit a second phase of the viability plan and that will become a public number at that point in time, but it won't be appreciably different from that range that I just indicated.

Jamie LaReau - Automotive News

Okay, thank you.

Mike DiGiovanni

You're welcome.

Operator

Mr. DiGiovanni, there are no further question at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.

Mike DiGiovanni

Thank you, again everybody for your time today. Hopefully, 2009 will be a better year for the economy, for the industry as the year unfolds, and I wish you all a happy New Year and we will talk to you again on Tuesday, February 3rd, when we report our January sales results. Good bye.

Mark LaNeve

Good bye.

Operator

Ladies and gentlemen, that does conclude our conference call for today. We thank you for your participation. And I ask that you now please disconnect your lines.

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