Will GM sales take a hit after recalls?

As General Motors shows off its newest cars and trucks in New York this week, analysts are watching for signs that consumers are shying away from the ones sitting on dealer lots.
By TOM KRISHER, Associated Press Modified: April 15, 2014 at 8:34 pm •  Published: April 16, 2014

— As General Motors shows off its newest cars and trucks in New York this week, analysts are watching for signs that consumers are shying away from the ones sitting on dealer lots.

Many expect GM sales to take a hit from a mishandled recall of small cars, though it’s unclear when and how severe. Any decline would hurt the automaker’s market share and potentially its credit rating. Concerned investors have sent GM stock to a 10-month low.

So far, GM executives say they’re not worried. Buyers recognize that the recalls affected older models and not the new vehicles in GM’s showrooms, GM’s global product development chief Mark Reuss said at an event Tuesday in New York to introduce a high-performance Corvette convertible and a new subcompact SUV, the Chevrolet Trax.

“We’re really not seeing people’s interest wane. It really is all about the products and the price and the value, and we’re creating that today,” he said. Reuss said traffic at U.S. dealerships hasn’t waned since the recalls.

Data collected from dealers by J.D. Power and Associates show GM U.S. sales fell 6.3 percent in the first five days of April compared with a year ago, while the overall market dropped just 0.3 percent. The same data show an even larger decline for Ford Motor Co.

Rebound month

April is expected to be a rebound month in the U.S. after a rough winter, and analysts do expect sales to pick up in the month’s second half. GM’s global Chevrolet chief Alan Batey said he remains optimistic about April sales, which started slow because March ended so strong.