• Jun 4, 2014

GM announced 13 separate recalls in May, but that was a mere footnote for consumers.

At least in theory, the past four months should have been trying ones for General Motors.

The company admitted it knew key details about a deadly defect in its cars for more than a decade, and that flaw was responsible for killing at least 13 motorists and probably more. In the ensuing fallout, the company has issued more than two dozen recalls that affect 15.8 million cars in North America.

Those recalls have dented profits, but they haven't dampened America's enthusiasm for GM-made vehicles.

Consumers either haven't noticed or haven't cared about the avalanche of safety hazards associated with GM's cars. Sales at the Detroit-based automaker have increased three percent in 2014, and as details of the crisis have steadily emerged, they've only gotten stronger.

In May, GM enjoyed its best month of sales since August 2008, the month before the start of the economic downturn in the United States. The company sold 284,694 vehicles, according to our latest By The Numbers report, a 12.6-percent improvement over May 2013.
GM announced 13 separate recalls in May, but that was a mere footnote for consumers.

It's the second consecutive month of sales momentum in the face of ongoing recalls for GM.

"I think they're doing a really good job handing a really bad situation," said Greg Smith, chief creative officer at The VIA Agency, an advertising agency that manages brand reputations. "They've created this internal safety review board, which sounds good, at least on paper, and I think that's another reason why people are willing to believe that this is a new GM. They're behaving like a contemporary company and not trying to obfuscate."

It's the second consecutive month of sales momentum in the face of ongoing recalls for GM. The company issued six recalls in April, and CEO Mary Barra was called to testify before two Congressional committees. Yet overall sales increased 6.9 percent in April.

Smith said one component of General Motors' success in weathering the crisis is that while company executives have caught the brunt of the criticism, the brands – Buick, Cadillac, Chevrolet and GMC – have gone relatively unscathed.

"Consumers aren't buying GM," he said. "They're buying the Impala or GMC trucks, and those products have gotten very good reviews at a variety of places. The consumer is going out there and seeing value in that."

It helps that the Cobalt, like other cars at the center of the ignition-switch recall, is no longer for sale.

Chevrolet, with its brand-name Cobalt at the heart of the ignition-switch crisis, has been particularly resistant to sales problems. Sales are up across all of GM's brands in May, but Chevrolet showed the most robust growth, with a 14-percent year-over-year gain.

It helps Chevrolet that the Cobalt, like other cars at the center of the ignition-switch recall, is no longer for sale. Still, some experts are surprised at both the growth of auto-industry sales in general and GM sales in particular as consumer confidence in the US plateaued over the past two months.

"Auto sales for the month of May seemed almost to defy logic," said Jack R. Nerad, senior analyst for Kelley Blue Book. "... General Motors' sales results epitomized that trend of defying logic."

Demand surged by 11.4 percent across the industry, year over year, and industry experts project that automakers could sell as many as 16.7 million new vehicles in North America this year, which would be the most in six years. Ford, which had its own recall of 1.4 million cars in late May, saw no diminished enthusiasm for sales. On the contrary, it enjoyed its best month of May sales in a decade.

Used-car prices for GM models have shown no significant fluctuations or discernible trends in recent months.

Paul Nadjarian, CEO and founder of MojoMotors.com, said his website has culled more than 35,000 leads to auto dealers over the past two years, and only two of those customers had inquired about recalls.

That applies to both new and used cars. Even as General Motors has sought to draw a line between the "old" pre-bankruptcy company that focused on sales volume and the "new" GM that is more responsive to potential safety hazards, used-car buyers are paying little mind to the potential pitfalls in GM vehicles.

Nadjarian said used-car prices for GM models have shown no significant fluctuations or discernible trends in recent months. The average price on a 2010 Cobalt LT has dropped by about $100 since February, according to MojoMotors data. On the other hand, the price of a 2012 Chevy Malibu, a recently recalled model, is up nearly five percent.

"The bottom line is consumers like the new GM products and big, aggressive sales incentives," Nadjarian said. "Recalls are just not a hot topic for the average consumer."


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  • 49 Comments
      behinddawindow
      • 6 Months Ago
      Garnish Rick Wagoner's GOLDEN PARACHUTE for ANY recalls!
      Ryan
      • 6 Months Ago
      Funny how you dont see articles written on here about 'why are people still buying Toyotas with all their recalls?' when they've had just as many as GM, 6.4 million in April alone. To answer the stupid question of why people are buying GM cars its because some people are smart enough to know the difference between the old ways of GM and the new. Also, some people take pride in their country and realize the new GM cars can not only compete with anything foreign but in many cases beat the competition. Something any American SHOULD be proud of instead of bashing them and wishing for their demise.
        express2day
        • 6 Months Ago
        @Ryan
        Why would you? The Toyota recalls are much in the past compared to GM. At the time, though, there were plenty of articles about how the recalls were impacting or had impacted Toyota sales.
      Renaurd
      • 6 Months Ago
      The consumer knows the difference in past and present.......They know the problem with the inferior starter is being addressed. They also know if you hang a ham on your keychain parts can fail. GM is making a good product, the extensive recalls further enhance their goal for better quality.........Other companies are debating as to whether they should do the same, eventually there will be a rash of industry wide recalling, and we will all be better for it.
        muspod
        • 6 Months Ago
        @Renaurd
        Keep drinking that "spin" kool aid...
          Ryan R
          • 6 Months Ago
          @muspod
          Just explain to me how what Renaurd said is "spin"? The only "spin" is what you hear from the "Government Motors" talking heads on certain news channels and people like you who make stupid comments without any validity or facts.
      Joe Carter
      • 6 Months Ago
      Just goes to show how Americans will buy **** if you trim it with chrome.
        Aaron N
        • 6 Months Ago
        @Joe Carter
        Just goes to show that people rather believe the media than what is actually happening.
          Jason
          • 6 Months Ago
          @Aaron N
          Your really into the Media thing... Maybe you should get off the Media thing, you know AutoBlog is a "Media Outlet"
      Basil Exposition
      • 6 Months Ago
      "It helps that the Cobalt, like other cars at the center of the ignition-switch recall, is no longer for sale" For me this is the key. I am no huge GM fan, I have only ever owned one, but I would not take the recalls of 10 year old cars into account at all when shopping for a new car. I would cross-shop the segment I was interested in and if the best one happened to be a GM, I would buy it.
        Doug
        • 6 Months Ago
        @Basil Exposition
        And this is the key - to not buy based solely on what you are told. To research, drive and compare to find the best vehicle.
        Tariff The Imports
        • 6 Months Ago
        @Basil Exposition
        It's not only 10 yrs old vehicles being recalled. Many 2015 models ( Cruze, trucks, SUV/ CUV ) and other current ones like Sonic , Malibu, LaCross, SUC/CUV's... Info is out there to check.
      Cruising
      • 6 Months Ago
      People think the consumer public is mindless and stupid, not really the case. I would buy a modern Chevy/Cadillac, they are well designed and have general appeal to me. Mrs. Barra despite what you think of her is doing the right thing, sometimes you just need a women's touch.
      mapoftazifosho
      • 6 Months Ago
      This is key... "big, aggressive sales incentives," Nadjarian said. I'd really like to see a full breakdown of the incentives GM offered compared to the other Automakers before making any calls...
      Victor
      • 6 Months Ago
      On the face of GM haters.... Keep on criticizing..... Consumers gives the final verdicts... Not the haters and critics... Great job cleaning the house by new GM leadership!
      SpikedLemon
      • 6 Months Ago
      IMHO: the negative press in the news associated with the GM recalls seems no where near the negativity laid on to Toyota. While Toyota's recall seemed to go on for months and was on the news daily: the GM series of recalls barely elicits a blip. It probably didn't help that, in Toyota's case, the government created quite a circus by calling in Nasa to prove, and ultimately support, evidence that there was no software glitch.
        express2day
        • 6 Months Ago
        @SpikedLemon
        Part of the reason may have been that the recall story, regardless of the company, was bigger news a few years ago because something like that or to that degree hadn’t happened in a long time. Kind of like the first space shuttle launch was a big deal but subsequent launches not so much. The Toyota situation by occurring first simply made the GM situation this year less of a big deal.
      DarkKnight67
      • 6 Months Ago
      Precisely - a person who wants to buy will buy based on their own observations and opinions, not those formed by someone who has a vendetta against a manufacturer. The son of a good friend went out and cross shopped all of the full size trucks - Ram, Silverado, Sierra, F-150 and Tundra. What is he buying? The Sierra, not because of incentives and not because he was coerced, but because after having driven all of them, the Sierra proved to be the best truck in the bunch.
      EJD1984
      • 6 Months Ago
      In the long run this "cleaning house" will payoff for GM. Seems like they're speeding up the recalls and just ripping of the band-aid now, getting the pain over with and moving one. To me this is a good sign all around that FINALLY there is good management at GM - First time ins 40+ years. *Yes - I'm anticipating the negative pessimist. :-)
      ebonys57
      • 6 Months Ago
      it just goes to show how stupid people are that keep buying from Garbage Motors
        mycommentemail
        • 6 Months Ago
        @ebonys57
        Ha Ha! "Garbage Motors"! Did you think of that all by yourself? Genius!
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