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General Motors Company (NYSE:GM)

August 2012 Sales Call

September 4, 2012 11:00 a.m. ET

Executives

Jim Cain – General Manger, Communications

Kurt McNeil – VP, US Sales Operations

Don Johnson – VP, Chevrolet Sales and Service

Brian Sweeney – Vice President, Buick-GMC Sales

Chase Hawkins, Vice President of Cadillac Sales

Sue Yingzi Su – Senior Economist

Alan Batey - Vice President of U.S. Sales

Analysts

Pat Nolan - Deutsche Bank

Chris Ceraso - Credit Suisse

Patrick Archambault - Goldman Sachs

Joe Spak - RBC Capital Markets

John Murphy with Bank of America - Merrill Lynch

Brian Johnson - Barclays Capital

Colin Langan - UBS

Ryan Brinkman - JPMorgan

Jeff Bennett - Wall Street Journal

Nathan Bomey - Detroit Free Press

Melissa Burden – The Detroit News

Phil LeBeau - CNBC

Tom Krisher – The Associated Press

Robert Schoenberger - The Plain Dealer

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the August 2012 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) Now as a reminder, this conference is being recorded Tuesday, September 4, 2012.

Your speakers for today are Jim Cain and 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. I hope you all passed a pleasant Labor Day. Thank you for joining our call. Leading our discussion about GM's August sales is Kurt McNeil, our Vice President of US Sales Operations, and we have several representatives from our brand channels here to support on the Q&A. I will just remind everybody before we get started that this conversation is covered by our forward-looking statements disclosure. With that, Kurt, the floor is yours.

Kurt McNeil

Thank you, Jim. Good morning everyone. Thank you for joining us. What I like to do first is review the highlights of the month, including several important milestones for our Chevrolet car product. Then I will address some of the opportunities and challenges that we face, and after that we will take the questions with the help of – from my colleagues in the room.

Okay. Let’s dig into the numbers. As you know GM reported U.S. sales of 240,520 vehicles in August, that’s up 10% compared with the year ago and ahead of many outside expectation. Importantly, all four of our brands posted higher total sales. Chevrolet and Cadillac were each up more than 11%. Buick was up more than 12% and GMC was up almost 4%.

Our retail sales meanwhile increased 11% versus a year ago. Here again all four brands posted increases, about 12% for Chevrolet, Cadillac and GMC, and 8% for Buick. This makes August our best retail month of the year. GM sales to fleet customers were up about 6% compared with the year ago and our year-to-date fleet mix is right in line with the 26% range that we have discussed before.

Now our most important highlight of the month is the outstanding performance of Chevrolet passenger cars which were up 25% in total and about 41% at retail compared with last August. The Sonic, the Cruze and the Volt all set new sales records and the Spark was off to a very good start with sales of more than 2600 units in the second month.

The Sonic which has now been on the sale of full 12 months has been a homerun for us. In its first year, we have sold 73,000 Sonics and the car has been number one in retail sales in this segment since April. August was also a very robust month for the Chevrolet Equinox crossover which was up 22% for its best August sales ever. I think this broad-based performance shows the power of the confidence message that we advertised for much of the summer, especially during the Olympics. It was a brand building message that really rang through with customers when they saw how much our product line-up has been transformed.

Of course, there were some exceptions to what on balance is a very good story. For example, the Malibu saw the decline but it wasn’t a surprise. As was the case in July we are in a bit of a quiet period between the sell-down of the old model which is nearly complete about 20 day supply and the launch of the high volume 2.5 liter four-cylinder models which are now arriving in showrooms.

As Don Johnson will tell you, our dealers are very excited about this next stage of the launch because the 2.5 liter Malibu will represent about three quarters of our mix. It will join the 2013 Malibu Eco which had its best sales month of the year and is the second best selling mid-sized hybrid of 2012. The big picture for our dealers and GM is even more compelling. The 2013 Malibu is one of seven Chevrolet passenger car nameplates that will be redesigned to all new in the 2011-2013 timeframe.

Now let’s turn to Cadillac. Last month we talked about how we were transforming Cadillac with a combination of excellent products and a brand experience custom tailored for our luxury customers. The pay-off has been recognition by JD Power as the most improved luxury brand, and a 21% increase in July sales. This month we delivered another double-digit sales increase driven by the Cadillac XTS large car and continued strong SRX and Escalade sales.

This renewed momentum will continue to build as dealers receive their first shipment of the all new Cadillac ATS, which are on the way as we speak. Here again the bid picture is very compelling. The addition of the XTS and ATS will give us our strongest showroom ever and coverage in 80% of the luxury market by volume, up from just 50% previously.

Turning next to Buick, the Verano has been a tremendous success for the brand. August marked its ninth consecutive monthly sales increase since launch. It helped Buick achieve its best retail sales month since September of 2007. When you also consider the GMC Acadia, sales were up 20% and the GMC Terrain were up 16%, it was clearly a good month for that channel.

Finally, our combined Chevrolet and GMC large pickup were up more than 6% year-over-year and 31% versus July. As we look at the pickup market, we are clearly at an inflection point. I say this because September usually marks an acceleration of the seasonal factors that favour higher truck sales this time of the year. And we’re also very encouraged by the continued sign of the housing recovery and the overall resilience of the U.S. economy. These are among of the reasons why we’re going to stay the course with the strategy that we have been following now for more than a year which is to compensate for launch-related downtime by carrying higher than normal truck inventories.

We know you're watching the inventories closely. So I will reiterate what we shared on our second-quarter earnings call in August. Through a combination of higher seasonal sales and holiday and launch related downtime, we expect full sized pickup inventories to be in the range of 200,000 to 220,000 units or about an 80 to 85 day supply by the end of the year. Of course, we’re going to watch the market very closely and remain flexible in our approach given all the variables.

I’ll close with a comment on the SAAR. As many of you know, the government releases the seasonal factors twice a year which are used to adjust monthly sales up or down to determine the annual selling rates. When you apply the new seasonal factors at least in August, the sales in the first eight months of the year, you will see a slow but steady upward trajectory for sales and 14.3 million light vehicle SAAR calendar year to date. We think this gives a more encouraging picture of the industry and it is more consistent with our previous expectation of market development, especially in the retail market. It also reinforces the theme that we’d talked about before. Autos have been a bright spot for the economy all year long, and we see that trend continuing.

All right. It’s now time for the Q&A portion of our call. Joining us are 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, our senior economist Sue Yingzi Su and Alan Batey, our Vice President of U.S. Sales and Service as well as our interim Chief Marketing Officer. Okay. Let’s take the questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Rod Lache with Deutsche Bank.

Pat Nolan - Deutsche Bank

Good morning. It’s Pat Nolan. A couple of questions. First on the truck sales, looked like you had a pretty good month again, and a pretty sizable pick up and seasonal run rate for the GMT900. Was there any pickup in promotional activity behind that?

Kurt McNeil

Yeah, we’re very positive about it, Pat. 6% we feel good about that, and when you look at it month over month we were actually up 31%. I’ll let Don Johnson comment and Brian Sweeney on the specific promotional place.

Brian Sweeney

Yeah, I guess a couple of points, first of all, (indiscernible) were actually flat to little bit down for the month compared to July, but I think the Silverado and Chevy side was part of the Olympics communication. So certainly as we built traffic around that promotion it certainly would have helped Silverado.

Pat Nolan - Deutsche Bank

And did you see any change in the pace of sales for trucks in the month, particularly as gasoline prices were escalating towards month end?

Brian Sweeney

Nothing – I mean there was a little bit up and down but nothing that I think we could put down to any sort of long term trend.

Pat Nolan - Deutsche Bank

Do you have an estimate of what you think industry fleet sales were in the month?

Kurt McNeil

We think it’s right in the range of 2.5 million, Pat.

Operator

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

Chris Ceraso - Credit Suisse

Want to talk a little about the trucks, you mentioned the inventory and yes we are watching that closely. You are expecting seasonal increase in volumes plus the downtime to help draw the stock levels down. I guess the one variable that you didn't speak to that's really important is what your expectation is regarding GM's market share in that segment which in recent months has been relatively weak compared to where you typically had been running. So what’s your expectation on share or what’s your plan in terms of promotional activity to try to bolster the share until we get into the new model?

Kurt McNeil

Yeah Chris, obviously we can’t go into future promotional plan. We do see the industry, to your point, getting better. Full sized pickup as a percent of industry was 10.9 this month versus 10.4 a month ago. But we do see industry getting better. Like I said our full sized pickups were definitely up not only year-to-date, but month over month. Our incentive spend was actually down month over month. So we were able to do those increases with a reduction in incentive spend. And I will let Don or Brian comment.

Don Johnson

Just a quick I guess observation, this time of year, as we talked about when the seasonal factors for pickups start to increase, probably it’s a time when our dealers get even that much more focus on truck, to get that much more focus on trucks. So we expect to have a third share of the segment as it grows for the rest of this year and we’ll put plans in place to ensure that happens as we always do this time of the year.

Chris Ceraso - Credit Suisse

I haven’t seen all of the numbers yet. But as of last month, I think the share – GM share in the full sized pickup market was in the lower 30s and typically it’s been in the higher 30s. Can you comment on that and maybe give us a feel for where you think it shook out this month?

Don Johnson

I don’t know what it’s going to shake out this month, but clearly when you look at what’s happening inside the full sized pickup segment, we’ve actually gained share with our heavy duties which is our newest body style. We have given up some share in light duties. I think a couple of things happened in there. First of all, we’ve been reasonably prudent with our incentives. Secondly, a number of our competitors have gotten out of the midsize segment. I think they are moving some people up to the low-end, particularly as they have been very aggressive with their entry-level full sized trucks.

Chris Ceraso - Credit Suisse

Just one last on the Regal, which got off to a good start and was a pretty good selling product. And it seems that the Verano has kind of gobbled up some of the share there. What’s the game plan for having both of those in the showroom?

Brian Sweeney

Hey Chris, it’s Brian Sweeney. On Buick, Regal entry, we had a great Regal month when you look at Turbo and GS sales. Combined we’re 60% of our mix there, so 48% Turbo, 12% on GS, that was a record of those variants within the Regal platform and then Verano, nine back to back months of sales gain. So the two of those cars are working in tandem in the showroom. So we’re real pleased with both Regal and Verano last month and the past few months. So it’s working good.

Operator

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

Patrick Archambault - Goldman Sachs

A couple just on the industry here. If indeed I think you said monthly fleet your estimate for August was about 2.5 which would I think be down sequentially from last month and imply a pretty nice sequential uptick in retail sales. So I don’t know if this is maybe one for two, but what do you attribute that pretty big sequential increase to?

Kurt McNeil

Yeah, we can let Su comment on the economy. Yeah we actually - July fleet wide was about 2.3 million – was 2.3 million and we’re estimating, if this month to be 2.5 go up a little bit. But to your point in retail it should be the best retail SAAR of the year. So we feel really good about that. There are new seasonal factors out there that pretty much it went laid across Q1 and Q2. There is a pretty nice little gradual steady growth line consistent with what we've been talking about. So I’ll let Su comment on what we see in the economy.

Sue Yingzi Su

Overall the total industry strengthened in August. And fleet are strengthened from 2.3 million to 2.5 million. However the retail industry also strengthened and perhaps even more from 7 million to – slightly about 12 million. So we will see overall broader economic even though we see a very slow rate of gradual improvement have helped total industry growth not only on the fleet side. And we do see employment growth picked up a little bit pace in the month of July and housing sectors continued to show signs of recovery in so far the first seven months of the year, and that helped the overall sentiment towards the auto sales.

And don’t forget, even so, even at this level, the current level we have been well below the trend sales for the industry. And it has been so long consumers and businesses have been holding off their purchases even starting from 2008 until now, the sales have been very slow, has been well below the trend. So all these factors combined, plus the current very well favorable purchasing environment, including the more fuel-efficient new products and including the very low auto financing interest rates. All combined that contributed a very well supportive environment to purchase a vehicle. So I think this is what prompted the fleet sales increase in the month of August, as well as the retail industry.

Patrick Archambault - Goldman Sachs

One other real specific one if I may. I just note that – it looks like there is a pretty big performance difference this month between the Malibu and Impala. Impala is up very, very nicely and Malibu is down quite a bit. Is there a promotional activity that’s kind of tweaking the sort of performance between the two there or can you tell us a little bit more about that?

Don Johnson

It’s Don Johnson here. I think the biggest thing you are seeing in Malibu performance and Kurt alluded to it is that we are basically out of the 2012 and we’re just now starting to build inventory on the higher volume 2.5 liter 2013 Malibu. So really Malibu is going through the transition right now. We certainly expect as we get to both September but importantly, October we will start to see that pickup.

Operator

Our next question comes from the line of Joe Spak with RBC Capital Markets.

Joe Spak - RBC Capital Markets

Just a couple of quick questions. One, on the Malibu, what – it sounds like that the drawdown is really what impacted the sales now in terms of timing there. Were there any lessons learned from how you handled that transition that can be applied to future products so we don’t sort of see large months on disruptions?

Don Johnson

I’d always rather sell a car than month than hope to sell it next month and in that vein we sold a lot of 2012 I would say a little bit quicker than we had originally forecast. But I wouldn’t say that there is anything specifically we learned from that, that we would change going forward. I am just pleased with the rate of sales we had in Malibu all year as we’ve transitioned.

Joe Spak - RBC Capital Markets

And then on the new ATS, is that – should we expect to be a – or September to be a fully stocked month or still a ramp up through September?

Chase Hawkins

This is Chase Hawkins from Cadillac. ATS has just started to ship now literally on Friday of last week. So we have the normal ramp up period on ATS. And so expectation for high stock levels will be a little bit later on beyond the month of September at this point of time.

Operator

Our next question comes from the line of John Murphy with Bank of America - Merrill Lynch.

John Murphy with Bank of America - Merrill Lynch

Kurt, just sort of on your outlook for the full year and maybe for the remainder of the year, there has been a lot of folks who have been sort of hedging their bets to the lower end of their range for the year. But it sounds like what you are talking to, you’re sort of alluding to maybe the SAAR continuing to improve through the end of this year and actually maybe not certainly midpoint of the higher end of your range. I don’t want to put too many words in your mouth. But I mean it sounds like that’s what you guys are alluding to. Is that correct and what factors do you will maybe continue to carry the SAAR slowly higher through the remainder of the year?

Kurt McNeil

Yeah, John, you did capture that correctly. We think as you look at the industry especially with the new seasonal slate on top, we see a nice gradual increase. There are continued economic challenges. Su spoke to where we see the upside, which has been primarily housing and autos quite frankly and we’re still in that range of 14 to 14.5. But right now we’re looking at an industry that’s coming in, it looks to be about 14.6. So we do see slow, gradual consistent growth in the industry. And that housing – that impact on seasonal trucks. We selfishly with our great car portfolio that we have, we do see a lot of opportunity in the back half of the year, growing the new Malibu, growing the new ATS and we’re bullish.

John Murphy with Bank of America - Merrill Lynch

And then just a second question on marketing versus incentive dollars, and this might be for you Kurt as well, maybe for Alan as well. It seems like in the last month or two there has been a little bit more of a advertising push around the products and maybe a little bit of pullback on incentives as you’re getting a lot more new products to ensure. I was just curious if that’s something we can expect to see for the remainder of the year and even over the next couple years as you launch a lot of new products? And then also in the short run, as you navigate what will likely be a very busy campaign season around the presidential election, is that strategy going to continue to work pretty well of the next couple of months, or are you going to get crowded out and we might have a little bit of risk around the election but then it will pick up thereafter?

Kurt McNeil

I will start first and then I’ll let Alan weigh in. To your point, we feel good about the fact that our ATPs were up month over month and our incentive spend was down month over month. That’s consistent with how we’re going to the market. I think it sticks to the strength around our new products and how well they’re being received in the marketplace. As far as our marketing plans for the currently and then the back of the year, I will let Alan weigh in on that.

Alan Batey

Yeah with regard to the Olympics in August, frankly, we are delighted with the results. The platform exceeded our expectations. The attendance levels were higher than the Beijing Olympics, which were an all-time high. So we were delighted with our investment there and our ad tracking shows us that our ads really were memorable, broke through, and really helped our brands. And obviously we were advertising both Cadillac and Chevrolet through the Olympics.

With regard to where we go now and the end of the year, frankly we create a great momentum around all of our launched products and I think you’re going to see that continue. We will continue to promote and define the great value we’re offering but also importantly some of the unique features that we got integrated into our new products. We’ve got a huge entertainment story to be told across all of our brands and that will be a clear focus. But we are excited and I think our ATPs and our incentives are clear evidence of the success of our new products, because we are growing sales at retail with a very, very controlled approach. And that’s going to continue looking forward.

John Murphy with Bank of America - Merrill Lynch

There is sort of this view that incentives throughout the industry are ramping up a little bit. Is that sort of in conjunction with MSRPs increasing, so we are just seeing these average transaction prices going up? And there is this kind of concern around a single factor but second factor in the MSRP is not being taken into account as well to figure out the actual improvement in pricing here? It seems like there is a misbalanced perception?

Kurt McNeil

That's an interesting perspective. I think MSRPs and incentives work together to create ATP. So what we look at is the fact that ATPs are increasing, and that’s what we’re focusing. The thing that we feel best about John is that if you look at incentive spend as a percent of ATP, we are the lowest of the domestic competitors and we’re even lower than two of the three Asian competitors. So incentive spend as a percent of ATP we feel pretty good about it. We have to control our own destiny, stay disciplined and that’s what we intend to do.

John Murphy with Bank of America - Merrill Lynch

Given what actions you’re taking and your competitors are taking, it’s not like there is a price war breaking out here and actually it seems like there might be a little bit of support for pricing across the industry in addition to what you’re able to achieve, is that a correct interpretation?

Alan Batey

This is Alan Batey. I would say the Japanese are playing a different strategy to us and frankly, we’re not going to follow them down and retail products to get down to the pricing where they’re playing across many of their products. So frankly, it has been a game changer. And if you go back two years and you look at the market positioning of - take compact cars, the Japanese compact cars versus ourselves, clearly they were able to command a lot more than price we were. And today we are commanding a lot more price than them and I think it’s on the strength of our products.

Now I think the Japanese are playing very aggressive on price but frankly our product is standing up and we are not having to talk about the tactics.

Kurt McNeil

John, when you consider, we sold almost 26,000 Cruzes and it’s still one of the higher ATP in that segment and about $350 below industry average in incentive spend. That’s a pretty good story.

Don Johnson

John, we’re not talking about a couple thousand bucks, we’re talking about a couple of thousand dollars difference in price.

John Murphy with Bank of America - Merrill Lynch

Versus your old models.

Don Johnson

No, versus the Japanese that I just mentioned.

John Murphy with Bank of America - Merrill Lynch

Okay. There is not big of a difference at this point.

Don Johnson

Yes.

Operator

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

Brian Johnson - Barclays Capital

I wanted to ask you about your views on the SAAR factor revisions, sort of a technical question. The BA revised the factors early in August. It looked like they in general revised the first half of this year and last year down so the 15.1 million we saw in February disappears down the February haul. It looks like it’s a boost at least by numbers about to 600K in terms of the run rate versus had we used last August’s factors? How do you see the factors, what do you think drove the revisions? Do you have your own internal factors that try to smooth some of these out? Now notwithstanding, we still have a very healthy unit pace but it does look like the revision of SAAR factors has somewhat boosted the headline?

Sue Yingzi Su

Brian, thanks for the question. Indeed, the revision of the seasonal factors has changed the pattern of the sales for this 8 months of the year somewhat. And we usually have a drop in Q2 and now we pretty much had a flat H1, the first half of the year. And using the new SAARs that we use now we could see a gradual improvement of industry. Now we really have a different set of seasonal factors, internal seasonal factors because that will probably create more confusion because then we are talking about different amount of wages across the industry. Here is the source of official seasonal factors.

So although we always try to reconcile the SAARs with the outlook of the economy and industry fundamentals and so far we think the new revised seasonal factors and result of these new SAARs have been pretty consistent with our outlook and our thoughts of the economy and industry at the beginning of the year and it’s certainly – it is a more encouraging trend of industry. So that’s our take and we continue to review the SAAR – what the SAAR says and what we hear and feel about ourselves. So that’s our look at the SAAR’s pattern.

Brian Johnson - Barclays Capital

Several of the revisions continue to provide a tailwind to the next months.

Sue Yingzi Su

As a baseline, we think it will provide a pretty encouraging trend line as Kurt has just said and with all the improving economic factors and we think probably it will do so. At the same time though we also keep in mind a lot of challenges with economy we’re facing and have been facing for quite some time. So headwinds, we also keep in mind, however our baseline is that yes, that will be a pretty fundamental improvement and good upward trending in the industry.

Operator

Our next question comes from the line of Colin Langan with UBS.

Colin Langan - UBS

I’ve got a question of questions. One, can you just clarify – I know there are comments on pickups from the overall industry. ATPs and incentives – ATPs up year over year as well as month over month, incentives down year over year as well as month over month, and now you commented month over month, just to make sure that year over year is the same.

Kurt McNeil

All right, Colin, we are grabbing on here. Yeah, our pickup ATPs are up about $2000 year over year and our incentive spend is down I will say a couple of hundred dollars year over year.

Colin Langan - UBS

I guess I was trying to get the overall – your incentives overall were improved year over year or down year over year.

Kurt McNeil

The ATPs were up about $43 – I am just picking up the data here - up about $43 and incentive spend was up a little over $100. Year to date.

Colin Langan - UBS

That was the calendar year-to-date numbers?

Kurt McNeil

Yes.

Colin Langan - UBS

And year over year in this month, incentives were down or up?

Kurt McNeil

Up less than $100. Down 116 month over month, up year over year about 90 bucks, Colin.

Colin Langan - UBS

And just can you comment on the daily rental mix and then the last question would be, just any color on the Cruze that jumped pretty dramatically from 13,000 to 26,000, and what do you think what’s driving that huge month over month increase?

Kurt McNeil

Yeah the rental mix, I will answer that first and then I will throw at Don Johnson. The rental mix was 17.3% calendar year to date. The month was 16.4%.

Don Johnson

Clearly, just on the Cruze, a couple of things are driving it. Clearly rate retail month, I think driven largely by inclusion of it in some of our advertising through the Olympics and the benefit of the Chevrolet total confidence program. We did also have a good overall fleet month, again sort of in line with what’s the annual going to be but it was both a fleet and a retail strength behind through this month.

Operator

(Operator Instructions) The final analyst question comes from Ryan Brinkman with JPMorgan.

Ryan Brinkman - JPMorgan

I was wondering given that it looks like August might be the strongest month of the year. If there are any metrics that you’re tracking or perhaps are able to track which suggests a release of pent-up demand or maybe phrase I guess a different way, do you think that sales are accelerating sequentially more than you would ordinarily expect just by looking at the macro-economic indicators that you typically track?

Sue Yingzi Su

Hi Ryan, it’s Sue. Pent-up demand definitely a major driver for the recovery in the auto industry. As we just said, we have seen the economy has been slowly and gradually improved, although we would hope it could increase at a faster pace. However I couldn’t deny this increase in economy, it is some of the fundamental drivers that we have stabilized consumer and business sentiment and that will be the major driver to help release the pent-up demand. As we just talked a moment ago, that we said pent-up demand has been building for a long time, since 2008, as recession just started, and until now we’re still well below the trend. So there is a good foundation that people will need to replace their old vehicles and the total light vehicles now is aging close to 11 years old. So that’s very old.

And when people have what they need, they will be able to replace and that will happen any time. It occurs that, always happens to be the highest amount of the sales, and definitely pent-up demand is one of the major drivers and also we see the new product and the other low interest rate and other factors that force the auto sales. Well, and we also saw the trend generally speaking is on the upward for the current – for 8 years so far. And we also said just a moment ago, that underlying trend will still be a slow and gradual improvement in our industry but it doesn’t mean that we do not have the ups and downs monthly, month by month. So we will probably still see the fluctuation month by month. However underlying trends we are pretty positive that we will still see a slow and gradual improvement for the industry.

Kurt McNeil

Yeah, that’s where we see the opportunity, right. I mean, our new products are there to take advantage of that opportunity. So when we see record months for Spark, record months for Sonic, the Cruze, the Volt, Cadillac XGS, Verano offsetting sales records – monthly sales records, it speaks to taken advantage of that opportunity.

Ryan Brinkman - JPMorgan

On those new products, can you speak to your apparent ability to ramp Sonic and Spark sales without cannibalizing the Cruze, because it seems that one of your competitors has had a harder time sustaining both compact and sub-compact sales at the same time?

Don Johnson

Yeah I just think it’s a testament to the quality of the products, the fact that they are targeted very specifically at discrete customers within those segments. So –

Kurt McNeil

I think the Chevrolet team has done an exceptional job of keeping those products separate and targeted. Obviously we don’t want to speak to our competitors.

Operator

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

Jeff Bennett - Wall Street Journal

Just a one quick one and a follow up. Kevin, you had said that 14.6 SAAR, is that what you’re thinking that the year is tracking at right now?

Kurt McNeil

Yeah, Jeff, right now for calendar year to date we see a track in that 14.3. Right now we are calling the month at approximately 14.6.

Jeff Bennett - Wall Street Journal

14.6. And are you thinking 14.6 for the entire year then?

Kurt McNeil

No, we are still – we’ve only stayed in that range Jeff from 14 to 14.5, we would not call a specific number for the industry, for the year.

Jeff Bennett - Wall Street Journal

It was interesting you’re seeing the Japanese automakers kind of ramp up incentives. What do you think is going on there as far as do they just have the deep pockets and they are trying to make up or win back customers or what is their kind of game plan that you see playing out so far?

Alan Batey

This is Alan. Look, I think obviously when you do a year over year comparison, obviously it’s a very difficult thing to really draw anything from because obviously the tsunami effect of the year ago when the Japanese were affected out of the inventory. So you take a longer term approach and you sort of look at perhaps 2010 and then look at 2012, interesting enough what you then see both Toyota and Honda down quite dramatically from a market share perspective. And if you look at our four brands, you see that over that period were up about three-tenths. So what do I put that down to? I think I’d put it down to the fact that we’ve been very successful with our new vehicle launches and perhaps their new vehicle launches have not been as well received. And they are using price as one of those levers to hit the volume aspirations that they have.

So I don’t want to talk for the other manufacturers but I can tell you that we remain very disciplined, very deliberate in our approach. We also have great value and what you are seeing is a lot of conquest customers coming to our brands which is fantastic. You’re seeing improved residual values and over time you’re also seeing that our brands are growing in opinion and consideration. So I think there is a lot more to come but we’re very happy with the progress.

Operator

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

Nathan Bomey - Detroit Free Press

Just a quick questions, just kind of been asked already but with Sonic, do you get a sense for whether as it plays out, you will start to see some Sonic buyers flee back into Cruze or even go down to Spark as the freshness of Sonic wears off? And also I guess Spark sales seem to be pretty solid. Are you – what do you attribute that to?

Don Johnson

It’s Don Johnson again. First of all, there is always going to be some as you call it bleeding between segments because there are showroom dynamics and someone comes in, one vehicle and they see features they like on another one. What we’re trying to look at right now is what our total performance is in particularly our small and compact and mini cars. And net, net we are seeing as you’ve noted a heavy healthy increase. So I don’t mind if there is a little bit of movement between Sonic and Cruze, Sonic and Spark, or vice versa. It’s net that I want to look at for all three of those segments, and I don’t expect that, that positive trend will change.

We’re seeing on Spark as an example, non-GM trades coming in the 62% which I think is the best we have in our portfolio right now, is attracting a younger consumer which we like to see. So right now when you look at those three vehicles, it’s really all bit.

Operator

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

Melissa Burden – The Detroit News

I wanted to ask about Cruze. I was wondering if you could give us a little bit more detail on when you said between retail versus fleet for the month and also two, because I was wondering if you could give us kind of what day supply is for that vehicle. And someone had mentioned conquest, I was wondering if you had any info on conquest for the Cruze.

Don Johnson

Yeah so let me start by saying that the fleet percent of total Cruze sales this month was about 30%. Year to date it’s less than 20%. So we expect it’s going to come in less than 20% by the end of the year. But I also said both retail and fleet had excellent months or excellent performance this month. So I think there is a pretty good balance there. When you look at ATPs, ATPs continue to be very strong, Alan mentioned $1000 to $2000 over some of the traditional leaders in that segment. Remind me what your other question was at the end of that? Day supply.

Yes days supply around 59, which is pretty – I would say pretty healthy for us right now and we are continuing to get a large proportion, the majority of the customers that come in and buy a Cruze, or not GM vehicle. So it’s about 52% of non-GM owners when they buy a Cruze. Very good trend, we saw that we first launched the product and it’s been fairly consistent as we’ve gone along.

Melissa Burden – The Detroit News

With the Chevy confidence program, I was wondering if you could give us a little bit of color around that in terms of if you think that drove considerable amount or higher percentage of Chevy sales for the month. And secondly, with that, I mean do you see more people that were opting for the extra cash towards the vehicle or for the possible return.

Don Johnson

Yeah a couple of comments on that. First of all, as we discussed during the call at the end of July, we were just then starting to build momentum. All of the Olympic media was just really hit starting the last week of July. So we expected that, that momentum would build and in fact, it drove the month, and that’s a big reason for the sales performance. As you probably know, there were really two components to it. There was the total confidence pricing as well as love it or return it. We found is that the love it or return it piece really helped build opinion for our brand. It was as much a brand building initiative which we expected but it did show in the research if that’s what consumers are playing back to us.

Certainly the pricing piece was also very attractive to customers but I would say in terms of driving short term sales that was a total confidence pricing, that probably had the biggest impact on it. We did see a large portion of customers once they got in the showroom opt for the cash but importantly it was the over overall program that drove them into the showroom. Many customers when they got into the showroom said, hey, I believe in these vehicles. I see absolutely no reason that I would expect to return it. So that portion of vehicle, our customers took the cash, we did have the modest number obviously signing up for the love it or return it dimension as well.

Operator

Our next question comes from the line of Phil LeBeau with CNBC.

Phil LeBeau - CNBC

Hey guys. Quick clarification on something. There is a fair amount of speculation going on regarding the industry seeing stronger demand for pickup trucks as an indication that we’re in an inflection point with the housing industry. What’s your guys take in terms of the demand that you saw, how much of that can you attribute to the resurgence or at least improvement in the housing industry?

Kurt McNeil

Phil, it’s Kurt. We did see an uptick in pickup as a percent of industry, was 10.4 last month and it’s looking at 10.9 this month. That’s right in line with our expectations. There are seasonal factors that lead to think that in the back half it’s going to be closer to 12%. So the housing is probably along with autos the brightest spot in the economy. So we are still bullish.

Sue Yingzi Su

Hi this is Sue. Housing, if you make a lot longer term of correlation between housing and pickup sales, they are very closely correlated, over 70% of correlation. So with housing picking upbeat although from a very, very low level, you see naturally it will provide some very good momentum, positive momentum to pickup sales.

Operator

Our next question comes from the line of Tom Krisher with The Associated Press.

Tom Krisher – The Associated Press

I just wanted if you guys could tell me what your day supply was and how much you had it in inventory of pickup trucks at the end of the month. And then do you really see obviously it’s kind of turning the corner here for pickups and are we I mean much stronger than here and out?

Don Johnson

Tom, the overall inventory and day supply are in the press release. We are currently at 122 day supply for pickups. That is in line with our plan. The overall volume is a little over 249,000 and it’s the plan. So we will continue to watch it very closely. We definitely like the fact that there was a nice uptick both for the industry and for us last month. We do see that stronger in the back half of the year. And so it’s in line with our expectation.

Operator

Our next question comes from the line of Robert Schoenberger with The Plain Dealer.

Robert Schoenberger - The Plain Dealer

It seems like you had the questions about the Cruze, and I’ve got a couple more. Going from probably the worst month in the past 10 months to the best months in the car’s history, it looks like fleet had something to do with that. Were there any specific incentives on the Cruze? It’s such a huge turnaround from the July numbers.

Don Johnson

As I said a couple of minutes ago, I do think that the biggest thing that impacted it was the advertising and promotion that we had over the market.

Robert Schoenberger - The Plain Dealer

So my next question, where aren’t you advertising it more often if you get this kind of results after a big event like the Olympics?

Don Johnson

The Olympics was – it’s certainly unique time and a unique opportunity with the kind of share of voice you get with Olympics. But certainly we will continue to focus our advertising on Cruze as one of our core vehicles.

Operator

Mr. Cain, this concludes the Q&A session at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.

Jim Cain

Thank you very much. I would like to announce a one calendar date for both media and the analysts before we close this call. And that is that General Motors will be announcing its third quarter earnings on October 31 and we will have that information posted to our investor and media relations websites later today but I wanted you to have the date. And with that, if you have any follow up questions, you can reach me in the office via email. And thanks for joining us.

Operator

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

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