Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

General Motors Company (NYSE:GM)

U.S. Sales Conference Call

March 1, 2013 11:00 am ET

Executives

Jim Cain - Manager, Financial Communications at General Motors

Kurt McNeil - U.S. Vice President of Sales Operations

Don Johnson - Vice President of Chevrolet Sales and Service

Chase Hawkins - Vice President of Cadillac Sales and Service

Ed Peper - Vice President of Fleet And Commercial Sales

Brian Sweeney - Vice President of Buick, GMC Sales and Service

Mustafa Mohatarem - Chief Economist

Alan Batey - Vice President of U.S. Sales and Service

Analysts

John Murphy - Bank of America Merrill Lynch

Vijay Chugh - Morgan Stanley

Brian Johnson - Barclays

Joe Spak - RBC Capital Markets

Rob Maher - Credit Suisse

Patrick Archambault - Goldman Sachs

Itay Michaeli - Citigroup

Dan Gallatin - Deutsche Bank

Tom Krisher - Associated Press

Ben Klayman - Reuters

Jeff Bennett - The Wall Street Journal

Melissa Burden - The Detroit News

Mike Colias - Automotive News

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company February 2013 U.S. 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, Friday, March 1, 2013. Your speakers for today are Mr. Tim Cain and Mr. Kurt McNeil.

I would now like to turn the conference over to Jim Cain, GM Communications. Please go ahead, sir.

Jim Cain

Good morning, everybody, and welcome to the GM February sales conference call. Hope you received our press release and associated charts. As always, leading today's discussion is Kurt McNeil, and we have leaders from across GM's four brands for the Q&A session. I will just remind everybody as always before we begin that our discussion is covered by our forward-looking statements disclosure which you can read in our press release..

With that, it's my pleasure to introduce Kurt McNeil, Vice President of U S Sales Operations.

Kurt McNeil

Thank you, Jim. Good morning, everyone, and thank you for joining us. As we always do, we will use our time together to cover the highlights of GM's performance during the past month. We will also give you our perspective on the industry and then we will take your questions.

Clearly, 2013 is off to a very good start for both General Motors and the industry as a whole. We had our best February since 2008. An a retail basis, this month was our best February since 2007 for Chevrolet, Cadillac, GMC and Buick. It now appears likely that the light vehicle annual selling rate was in the 15.5 million unit range in February. We have not seen a February this strong 2008 when the light vehicle start was 15.6 million but the difference between then and now is that the escalator is heading up and not down.

In fact, February was the industry's fourth consecutive month above 15 million units and the trend is consistent with our full-year forecast of 15 million to 15.5 million units. That’s not to say there aren’t any fiscal and structural headwinds but, net net, vehicle buying fundamentals are healthy as the selling rate attests.

For example, the recovery in home prices is building customer confidence, credit is available and affordable, and consumers appear to be taking higher payroll taxes in stride at least when it comes to replacing older vehicles. A significant tailwind for our industry is new home construction, which is creating jobs and fueling the demand for pickups.

In fact the full-size pickup share of the retail industry has now been above 11% for seven consecutive months. As we walk through our results you will see that GM really benefited from these trends. For example we were up 7% in total, with retail and fleet both up 7%. All four of our brands had higher year-over-year sales and we expect to finish the month with retail market share of more than 17%. This is better than January's strong performance and it is well above our 2012 calendar year retail share of 15.8%. This is obviously a very good result but needless to say we remain humble and hungry.

Now looking at sales by brand. Cadillac was up 20% on the strength of the new ATS and XTS, Buick was up 15% driven by the Verano, the Enclave and the all-new Encore. At GMC, the brand was up 10% in total. We saw double-digit sales gains for four of GMC's nameplates. The Sierra was up 25%, the Yukon XL was up 27% and both the Yukon and the Terrain were up 21%. The Terrain actually had its best February ever and its second best month of all time.

Inside of these numbers you can see the positive impact new cars and crossovers are having at Cadillac and Buick GMC. At Buick, the redesigned Enclave had its best February sales ever with deliveries up 26%. The Verano had another solid month with sales exceeding 4,000 units. The all-new Encore small crossover is building momentum with sales of almost 1,500 units in its second month in the marketplace.

At Cadillac, XTS deliveries exceeded 2,000 units, Conquest sales are exceeding our expectations with Jaguar SJ and Lincoln MKS the top competitive trade-ins. The ATF meanwhile had its strongest sales month since launch. It was Cadillac's best-selling vehicle. More than three quarters of ATF buyers are new to Cadillac. Nearly 60% are new to General Motors and our top trade-ins include the BMW 3 series and the Lincoln MKZ.

Over Chevrolet, crossovers and trucks were exceptionally strong. Chevrolet trucks, vans and SUVs were up of combined 18% and so were crossovers. On a nameplate basis, the Equinox had its best February ever with sales up 16%, the Suburban was up 13% and Tahoe was up 26%. Our newest crossover, the redesigned Traverse was up 9% in total and 20% at retail. It is clearly off to a very good start.

Turning to Silverado. We had a strong month once again, with sales up 29%. Our small business sales were a big part of the truck story in February, just like they were in January. Sales to these business customers who typically buy one to four vehicles at a time were up 40% year-over-year. That’s a strong vote of confidence in the underlying economy.

To help keep our truck momentum going strong, Chevrolet is announcing today that it will begin offering the best pickup coverage in America on the Silverado 1500. We already have the most dependable and longest lasting trucks. Our owners also enjoy the lowest cost of total ownership. Now we are going to offer complimentary scheduled maintenance for two years or 24,000 miles. That’s on top of the three-year, 36,000 mile bumper-to-bumper limited warranty and the five-year, 100,000 mile powertrain warranty

On the car side of the business at Chevrolet, the Spark achieved its best sales since launch with deliveries of more than 2,800 units. The Volt also did well. Sales in February were up about 43% from January when we were short of stock and year-over-year Volt sales were up about 59%. When you look at our small, compact and midsize car sales, we were down for the month but Malibu earned its highest retail share of the midsize segment since June of 2012. Similarly, the Cruze had its best retail segment share since October of 2012. Sonic remains a home run for Chevrolet with the lowest incentives and the highest ATPs in the segment.

As we said before, we want to grow both our absolute market share and the quality of our market share at the same time. So we are going to continue with the brand building approach that is creating value for both GM and our customers over the long term. The foundation is strong ATPs and residual values with competitive but not excessive incentives. For the month, our incentive were 10.4% of ATP according to J.D. Power's PIN which is down one half a point from January. All of our competitors increased incentives month-to-month, on an ATP basis, according to PIN.

With that said, its now time for the Q&A portion of our call. Before we open up the lines, however, I know several of you have questions about our Silverado and Sierra launches. So let me address what I can right now.

First we remain on track to begin the launch in the second quarter per our plan. This will begin a rolling cadence across our three pickup plants that will continue into the third quarter.

Second, we are planning to announce fuel economy, pricing and various performance statistics in late March. I won't say anything more about these subject except that we plan to put smiles on the faces of our customers.

Finally, we remain very comfortable with our inventories. In other words we are on plan and we are not contemplating any changes to our production given our strong performance and favorable outlook.

Okay, lets move to Q&A. Joining us are Alan Batey, Vice President of U.S. Sales and Service and Acting Chief Marketing Officer, Don Johnson, Vice President of Chevrolet Sales and Service, Brian Sweeney, Vice President of Buick, GMC Sales and Service, Chase Hawkins, Vice President of Cadillac Sales and Service, Ed Peper, Vice President of Fleet And Commercial Sales and our Chief Economist, Mustafa Mohatarem.

Okay, let's take some questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from the line of John Murphy with Bank of America Merrill Lynch. Please proceed.

John Murphy - Bank of America Merrill Lynch

Good morning, guys. The first question on what's going on with cars. Because the Sonic, the Cruze and the Malibu were a little bit weak. That doesn’t seem like that that was necessary or unique to you or what happened with your sales specifically. We are seeing that in other companies in the industry as the sales are being reported today. In the face of rising gas prices you would assume that these smaller cars would be doing better but they are not. Ds there something else that’s going on in the market below the surface that you guys are seeing? Is this the result of the pie cut and the late tax refund? What's going on there?

Kurt McNeil

Well, John, we had tough year-over-year comparisons. We obviously feel very good about our ATPs and our incentive discipline. Then you look at share of those segments, we do have some pretty good stories to tell. So, I will let Don Johnson comment from a Chevrolet perspective.

Don Johnson

Yes, it is Don from Chevrolet. Hs you noted, Kurt, we actually gained share in the car segment. It was the best shares since June of '12. I know, to your question, John, and I will just really answer, is the Chevrolet positions. So we are pretty pleased with how we performed within the industry. But the overall car industry fall off, as Kurt said, is more to do with the tough year-over-year. So the car industry was particularly strong a year ago and I think it is more of a February this year relative to February last year that we are seeing that because really month-over-month it was down a little bit but not as significant as year-over-year.

John Murphy - Bank of America Merrill Lynch

That’s very helpful. Then just a second question, Kurt. You have made some comment about ATPs, incentive to percentage of ATP increasing for the rest of the industry versus what you did month-over-month in February. I am just curious, are you seeing some competitors getting much more aggressive on incentives and pricing? Or are these just movement on the margin?

Kurt McNeil

No, we are definitely seeing the competitive set getting more aggressive. Our friends across town were very aggressive and we are seeing it come from different places. Toyota more aggressive than they have ever been. The Koreans getting significantly more aggressive than they have ever been. So absolutely. So we are proud of the fact that in December our incentives as a percent of ATP were about 11%, in January they went down to 10.9%, February where they went to 10.4%. So we are trying to stay very disciplined.

John Murphy - Bank of America Merrill Lynch

And are there any particular segments where you saw that activity pick up and there is lot of aggressive activity?

Kurt McNeil

Definitely small cars, compact cars. Yes, absolutely.

Operator

Our next question comes from the line of Adam Jonas with Morgan Stanley. Please proceed.

Vijay Chugh - Morgan Stanley

Good morning, everyone. This is Vijay, in for Adam. First question, I wanted to dig into production a bit more. It looks like February production was down 10% year-over-year versus 12.3% in January. Could you talk about what drove that drop and if that’s something we can expect to see going forward or if that’s more of one time in nature?

Kurt McNeil

Yes, Vijay, we didn’t have any significant changes. I mean obviously we continue to try and match supply with demand. So there wasn’t anything significant going on there.

Vijay Chugh - Morgan Stanley

Got it. If we could talk specifically about the Cadillac XTS for a second. There is about 6,000 of incentives right now on that particular model. Is that in line with your expectations of the incentives would progress with a product that’s only six months old?

Chase Hawkins

Yes, this is Chase Hawkins speaking here. So I can answer the question. If we look at XTS, and we look at our incentive play as a percentage of ATP, which is the way we always look at the business, we would have seen just a very marginal increase hitting into this last month, but if you look at where our competitors are, we are still at the bottom of the state. So I think for a new car the behavior is exactly in line. If we look at our competitors who have recently launched new products, they are trending ahead of us as well. There is also, if you look at our leasing penetration it is pretty low on XTS overall. That’s also driving that the overall leasing ATP at this point of time, as a percentage of ATP.

Vijay Chugh - Morgan Stanley

That’s very helpful

Operator

Our next question comes from the line of Brian Johnson with Barclays. Please proceed.

Brian Johnson - Barclays

Hi, good morning. I have a few question on the pickup truck strategy, especially the total cost of ownership unique selling proposition and the small business bucket. You mentioned small business sales were up 40%. Can you maybe give us a ballpark of what percent of the Chevy Silverado those are and when you talk about lead there, you are including in fleet or is that sort of a retail fleet number that you wouldn’t include in fleet and what this fleet looks like?

Ed Peper

I can address that. This is Ed Peper. Yes, the pickups were a big part of the small business performance, as we look at it. Our volume was almost 16,000 units between Silverado and Sierra, about 6,000 of those units. So they were well up. The small business numbers are part of our retail performance. They are not in the fleet numbers for GM.

Brian Johnson - Barclays

Okay, and how did the GMC fleet maintenance offer go over? You actually seem to lag Chevy despite that. Then when you talk to incentives over ATPs, are you including the future cost of the service business in that incentive number? Or is this sort of the cost myth, the percentage that misses that?

Brian Sweeney

It is Brian Sweeney on GMC. From a retail standpoint, Sierra, year-over-year, was up 28% calendar year-to-date, month-over-month, up 9% and calendar year-to-date, two months in, about 32%. I think we have great left out of Pro Grade Protection. The maintenance and warranty message was our exclusive messaging all month long. Dealers indicated that they found it very effective. A great closing tool. Stopped the shopping process and kept them right in our showroom and delivered some pretty strong sales results to the point that we are continuing here as walk in March and April with Pro Grade Protection.

Don Johnson

Yes, this is Don with Chevrolet. I want to add to that. I mean it was really the great results at GMC with the Sierra that prompted us to adopt the strategy. We had great feedback from both customers and dealers, quite frankly.

Brian Johnson - Barclays

So, did you have it show up in the incentive number?

Kurt McNeil

Brain, it is Kurt. No, it doesn’t. That’s not in there. And all the more reasons, given the performance that we have had, we feel really good about the fact that we are going to come in as number one in pickups again and it is actually the third month in a row. So some of this marketing and merchandising that both Brian Sweeney and Don Johnson talked about is very positive.

Operator

Our next question comes from the line Joe Spak with RBC Capital Markets. Please proceed. Go ahead, Mr. Spak, your line is open.

Joe Spak - RBC Capital Markets

Thanks for taking my question. So just a follow-up on that. You pointed out GMC retail mix is strong. In fact, quite stronger than overall GMC performance. Is there anything going on, on the fleet side at GMC this month?

Ed Peper

Yes, this is Ed Peper. When we take a look at our large van performance, our Express van sales were up. The Savana sales were down and that impacted GMC's performance. It was basically a few of our larger customers that we haven’t received the orders from yet.

Kurt McNeil

We are waiting for the orders.

Ed Peper

Plus, obviously for us, the loss of Canyon as well.

Joe Spak - RBC Capital Markets

Okay, and then as we get closer and closer to the launch of the next-generation pickups. Presumably you want to come out to come out of the gate with strong unit with high level mix on those trucks. How should we think about the inventory of the old trucks as well? Is it sort of the lower end trucks? How do you feel on that mix right there?

Kurt McNeil

I will let one of the guys comment but I think we feel very good about the current mix, Joe, as well as the current inventory levels. I know we have got a lot of questions about that but as you saw, 97 day supply, we still feel very good about where we are with our current inventory levels.

Don Johnson

Don from Chevrolet. The mix of the dealers who are ordering and selling right now has not changed significantly as we are going in to sell that which I think is a good testament to the current truck.

Operator

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

Rob Maher - Credit Suisse

Hi, guys, this is Rob Maher, filling in for Chris. I wanted to make sure I heard that right. The complimentary scheduled maintenance, that’s not going to show up in incentive numbers? Is that right?

Kurt McNeil

That’s correct, PIN does not give that because PIN is based on transaction price and incentive dollars level.

Rob Maher - Credit Suisse

Okay, so from an accounting perspective how is that going to work? At the time of sale, is there a cost that’s going to be accrued and roughly what is that cost per unit?

Kurt McNeil

I think there is lot of detail that we don’t want to get into right now, quite frankly.

Rob Maher - Credit Suisse

Okay, then just a different topic, I guess? It is pretty obvious that sales are holding up despite some of the fiscal and Federal tax headwinds that you mentioned. I am curious what are you guys seeing in terms of churn mix? Has there been any changes there? Sales maybe holding up but people moving downwards in term or mix?

Kurt McNeil

Yes, Rob, we are not seeing anything significant. You mentioned the fact that there was a lot of discussion about Washington right now but we still feel that the fundamentals are strong and they are going to continue to prove out. From a mix or a trend standpoint, we still see pretty good ATPs. Calendar year-to-date, our ATPs are up almost $1,000. So the mix is still pretty strong.

Operator

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

Patrick Archambault - Goldman Sachs

Hi, good morning. Thank you. A couple here. One more strategic, a couple of housekeeping. First, you are tracking sort of in the mid-15 in terms of start which seems like it's pretty much the midpoint of your calendar year expectation. Is that looking conservatives to you at this point, given it would just imply that we don’t really see the run rate increase? Or are there risks and issues that you would highlight that make you feel that that’s still probably a good estimate?

Mustafa Mohatarem

Hi, this is Mustafa. Keep in mind that that’s the top end of our range, not the midpoint of our range. We were deliberately conservative starting out the year because we anticipated that issues of losses would be really difficult to resolve and its pretty much playing out as we have anticipated. So we don’t to change anything yet.

Patrick Archambault - Goldman Sachs

Okay, understood. A couple of items. I thought that this was given but did you give the retail versus fleet in a performance on the pickups?

Kurt McNeil

Retail versus fleet on pickups were, we will get it here, Patrick. Retail overall versus fleet. Fleet was at 25% mix which is obviously right in our range. Hold on there.

Ed Peper

I could answer that one for you but the pickups for fleet were up 7%. The retail pickups were up 33% for a total up 28%.

Patrick Archambault - Goldman Sachs

Okay, terrific. Then one last one, if I may. Sometimes you guys have provided an estimate on the fleet from the market. I know it is preliminary but any sense of where that came in, fleet SAR, February versus January?

Kurt McNeil

We, right now, think that the fleet SAR will be about 2.8 million versus in January where it was 2.5 million.

Patrick Archambault - Goldman Sachs

Okay, terrific. Thanks a lot, guys. That’s all I had.

Operator

Our next question comes from the line of Itay Michaeli with Citigroup. Please proceed.

Itay Michaeli - Citigroup

Great, thanks, good morning. Just a couple of questions on pickup trucks. First around the potential for market share in the 12 to 18 months. We have seen some data suggesting that GM share, the pickup trucks on the road is over 40%. So quite a bit higher than your current sales share. Have you seen similar data? Has that a potential to convert to those to launch the new trucks and to gain some sales market share?

Kurt McNeil

Well, I will let Don or Brian comment here in a second but just to be clear, we see the segment going up, right. So roughly 11.8% was our last data point as a percent of industry. That’s up almost a point and a half. So that speaks to the opportunity. Then our share of that, we are calling right now at probably 40% plus. So we don’t think that we are at a deficit. So, Don, you got any comments on that?

Don Johnson

No, I think, it is as you said, Kurt. Our current performances are actually in line with what you quoted as being our percent of what's in the car cart right now.

Itay Michaeli - Citigroup

Absolutely, and then can you just give us an update on how these biofuel or natural gas pickups are doing since you have launched them?

Ed Peper

Yes, I am very excited and this Ed Peper. We have had a little over 1,000 orders. There is a lot of interest in CNG right now in the marketplace obviously. The one thing that has to happen is we need more infrastructure everywhere but the is a lot of interest and we have had over 1,000 orders which is kind of what we have pegged on so far.

Itay Michaeli - Citigroup

That’s great. Lastly, I am positive I missed it, but did you share what the pickup truck ATPs were year-over-year? Looks like by mid-month, they were up quite a bit. Can you confirm if they were up more than the increase in incentives in the month?

Kurt McNeil

Just getting that for you. Our ATPs were up about $500. Incentives about the same.

Operator

The following question will conclude the analyst portion. Following this question we will proceed with the media portion of the question-and-answer session. (Operator Instructions) The final analyst question comes from the line of Rod Lache with Deutsche Bank. Please proceed.

Dan Gallatin - Deutsche Bank

Hey, guys, this is Dan Gallatin for Rod. Thanks for taking my questions. I was wondering if you could talk a little bit about some of the higher volume products that have launched recently. The Lambda crossovers seem to be doing really well. Malibu, not as well. (inaudible) and Traverse, a little bit. Can you talk about what you are experiencing in terms of pricing on each of those vehicles? Anything you can give us in terms of how you are planning to improve on the Malibu with the early refresh we have heard about?

Don Johnson

It is Don Johnson with Chevrolet. Let me address the Traverse and Malibu. First of all, about three quarters of our sales right now are the new redesigned Traverse. We are seeing very good acceptance from both dealers and consumers. In fact this month when you look at retail Traverse sales are up 20%. So tracking nicely. Holding price well, as we would expect, with a newly redesigned vehicle. So, basically right on plan.

Malibu, as you noted, has had a couple of bumps but really when you dig into the number, you will see that retail sales were continuing to climb, month-over-month. Retail sales on Malibu were up 17% February versus January. When you look at the overall retail industry being up roughly around 14%, you can see that Malibu sales continue to gain share in the market, overall.

Supply, inventory is coming down nicely. We are a little higher than we would like to be at 120 days supply but we were at 160 last month. We did have a minor crisis position in January which I think really helped us, particularly when you do Internet searches for the vehicle, it is showing up very competitively.

Bottom line, it is very competitive set. It is in a dog fight with a lot of good products but the pieces that we have put in place are showing that we are making progress in improving both the sales as well as the share on the Malibu.

Dan Gallatin - Deutsche Bank

Okay, thanks. On the Traverse, specifically and the Enclave, Acadia. are you getting price increases year-over-year versus the old model?

Brian Sweeney

Yes, it is Brian Sweeney. If I can just talk Enclave and Acadia, real quick. Buick Enclave is doing really well, best February since straight month, year-over-year sales gains. Our transaction prices are up $1,800 year-over-year. That’s top in the segment. It is turning superfast in 22 days.

Acadia, number two in ATP right behind the Enclave. Same story there. Turning in 15 days. I think that’s leading the segment right now. So we feel very strong about our present and our start to both Enclave. Don, I don’t know if you want to add anything to that.

Don Johnson

Yes, typically on the Traverse side, ATPs are up just over $750, on a percentage basis very similar.

Dan Gallatin - Deutsche Bank

Okay, great. If I could just squeeze one in on the pickup trucks. Based on our estimates if the segment share of the industry stays flat where it was in January, your inventories look like they could get pretty low by the time when new truck launches. Obviously a good problem to have but what type of flexibility do you have to potentially increase production if you were to get too low?

Kurt McNeil

Dan, I guess I have got to tell you I find it funny that we are now questioning whether we are going to be too well, when in the last few months we have been questioned repeatedly about how high the levels are. So, I think we are we are in a very good place. I think 97 days is a very good place. As we look across the different brands and the different cap styles, we feel very good about where we are to transition in to our new trucks.

Dan Gallatin - Deutsche Bank

Okay, well, yes. Congratulations on a good plan on inventory levels to date. Thanks.

Operator

Our first question comes from the line of Tom Krisher with Associated Press. Please proceed with your question.

Tom Krisher - Associated Press

Good morning. Noticeable that your pickup truck, especially the Silverado, the increase was far higher than Ford and far higher than Chrysler. Any idea what's causing that? Is there more incentives out there? What is going on there?

Don Johnson

Yes, I can talk, Tom, its Don here to Silverado and as we mentioned earlier, our incentive on Silverado are actually down month-over-month but clearly we had a very strong voice in the marketplace with our truck month promotion and when you go out and let customers know what a great value you have, it’s a great product, it delivers sales. So its really all about, I would say, execution, and clearly as Ed Peper indicated before with small business owners coming back in to the market, that’s also helping us.

Tom Krisher - Associated Press

Then, converse of that, the Malibu is down almost 26%, Fusion is up 28%. Is there something incentive wise going on there too?

Don Johnson

No, I think as I outlined a little bit some of the action we are taking on Malibu, don’t forget a year ago we were selling down our old Malibu. So a bit of a tough year-over-year compare. What I am really focusing on is the month-over-month growth both in terms of sales and share. That’s where we are seeing some positive signs. I expect that to continue.

Tom Krisher - Associated Press

Then, in cars, are you worried at all that there might be a trend downward here? Is there something that you need to do there? Or is it just all kind of the year-over-year comp thing?

Don Johnson

It is Don again. For Chevrolet car standpoint, I don’t think there is anything that we are going to overreact to. I think we are a bit of a seasonal, bit of a year-over-year compare. But clearly with gas prices still hovering in the high threes, close to four, the car market is going to continue to be important and from our standpoint, given the strength of our current portfolio, we are just in a great position regardless of which way the market shifts.

Operator

Our next question comes from the line of Ben Klayman with Reuters. Please proceed.

Ben Klayman - Reuters

I just had a small one for Mustafa. You made clear that GM is not going to push up with outlook for the industry for this year. I was just wondering, at what point that might happen if, for example, are you waiting for a full quarter? Next month? Or do you need two more months since January and February are smaller volumes? At what point are you guys going to consider pushing up the outlook?

Mustafa Mohatarem

When we become much more confident that the underlying improvement is sustainable. I can't give you a specific date and time. We are very comfortable with the outlook.

Operator

Our next question comes from the line of Jeff Bennett with Wall Street Journal. Please proceed.

Jeff Bennett - The Wall Street Journal

Thanks. just a quick one. Did I hear right that you are extending the GMC Sierra maintenance program?

Kurt McNeil

Yes.

Jeff Bennett - The Wall Street Journal

To when will that go?

Kurt McNeil

March and April.

Jeff Bennett - The Wall Street Journal

Just because we have heard from different automakers on different sides of this, any more insight you can share on sequester? Some have said the talks, lower sales a little bit at the end of February. Others say that it has been brushed up? What have you guys seen?

Kurt McNeil

I will let Mustafa comment as well, Jeff, but all-in-all we see the basic fundamentals of the economy or what's driving the improvement in the industry et cetera. So housing, auto is certainly helping, availability of consumer credit. Those are all very good things that are helping fundamentally with the economy. It is all the short term conversation in Washington having a negative impact on consumer confidence. Yes, maybe to some degree but quite frankly we think that most of America is getting a little tired of hearing about some of this dysfunction. So we think that the fundamentals are strong and that’s what's important and that’s what's driving the economy. Mustafa?

Mustafa Mohatarem

Nothing to add, I think.

Operator

Our next question comes from the line of Nathan Bomey with Detroit Free Press. Please proceed.

Nathan Bomey - Detroit Free Press

Hey, guys. I guess this is probably a question for Alan. I know obviously you fund new roads launched last month but if you factor out Silverado sales, Chevy is down for the month. Can you put a date on the calendar and say we really think funding roads will start to do sales at this point or are you disappointed at all that it didn’t help too much last month?

Alan Batey

This is Alan. Nathan, obviously funding roads is a platform. We launched it at this time because of, all the new part launches that we have got coming. So I think it is a very exciting year to Chevrolet. We have got 13 new products in 2013. So I think what you are going to see is, as the year goes on, is a lot of momentum, a lot of new vehicles and accretive is obviously is being developed as we speak to support those launches. So we feel really, really good about where we are right now.

One point I would make, and it hasn’t come up, but I think it is a very relevant point of the progress that we are making. Right now, we have very few lease returnees coming back to our brands. Because of obviously the bankruptcy and the fact that we went through it a sustained period of time where we were not leasing any vehicles. So to see us growing the way we are at the retail level with the ATPs that we are able to command, I think is very, very encouraging.

Now, as we speak, we are building our lease portfolio and now leasing is very, very healthy. It talks all about brands. So we look forward with a lot of excitement that the momentum continues to build. We shouldn’t lose sight of the fact that as I said, there are those lease returnees coming to any of our brands right now.

Operator

Our next question comes from the line of Melissa Burden with Detroit News Please proceed.

Melissa Burden - The Detroit News

Hi, thanks for taking my questions. I just wanted to ask with, you had a couple of strong gains with truck sales. I am wondering if you are at all concerned about the momentum, maybe being clipped somewhat by higher gas prices? Are you at all concerned at all going in to March?

Kurt McNeil

Melissa, this is Kurt. We see a lot of that coming from a short-term situation with refineries being down here recently. Then an offset in supply and demand but that’s short term. We do not see any long-term run-up in gas prices. So we feel very, very good about where we are right now.

Melissa Burden - The Detroit News

Okay, and then I did miss, and I thought that maybe you can repeat them, what the incentives, if you guys are up or down and incentives for truck for the month? I know you had given that, I believe in ATP. I just missed the figures.

Kurt McNeil

Our ATPs were up $200 roughly in our incentive spend, specific on pickups we were up $200.

Melissa Burden - The Detroit News

Okay, thank you very much.

Kurt McNeil

Overall the incentives were down for all of General Motors. Our incentives were down month-over-month and the ATPs were up month-over-month.

Operator

Our final question comes from the line of Mike Colias with Automotive News. Please proceed.

Mike Colias - Automotive News

Thanks, a quick follow-up to Alan's comment on leasing. What is the overall lease penetration and how does that compare to the industry as a whole?

Kurt McNeil

I will tell you exactly here, hold on. Overall it was 19.2% for us and industry about 22.5%.

Mike Colias - Automotive News

Okay, great.

Kurt McNeil

Obviously a good month of truck sales. Because you don’t lease a lot of trucks. That has some downward effect, right.

Mike Colias - Automotive News

Just a quick one. Any evidence that customers are coming in to the showroom to look at a Sonic and moving into Spark? Are Spark sales starting to effect Sonic at all?

Don Johnson

Yes, Mike, it's Don with Chevrolet. Not huge of an impact. The Spark inventory is pretty low. We have got under 50 day supply right now. Spark is turning as fast as they can. Sonic is continuing to do very well. It is great to have the entire portfolio. We do have Spark, Sonic, Cruze and Malibu. While obviously there is always some interaction between those segment, when you step back and look at the total performance, particularly of the small car portfolio, we were up about 40% last year. So yes, there is some interaction but net net it is positive with the car portfolio right now.

Mike Colias - Automotive News

Okay, and sorry if I missed it on the Chevy. The figures included maintenance promotion. Is that just March and could that continue? Then just more broadly, would you ever consider making that affirmative program on either of those truck brands even after the new truck is launched?

are yin that

Don Johnson

We currently announced it for both March and April.

Operator

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

Jim Cain

Well, think you everybody for joining us and thank you for your questions. If there is anything you need to follow-up with, just give me a call in the office or send me an e-mail and we will take care of you right away. Thank you.

Operator

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

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: General Motors' Management Hosts US Sales Conference (Transcript)
This Transcript
All Transcripts