GM sales appear resilient amid recalls, dealers optimistic

Fri May 23, 2014 1:26pm EDT
 
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By Nick Carey

CHICAGO (Reuters) - In the midst of an historic run of recalls, including over one defect linked to at least 13 deaths, General Motors Co sales are showing resilience.

The No. 1 U.S. automaker is beating the industry average this month, according to one estimate, and more than 10 dealers interviewed by Reuters were upbeat, saying lingering concerns about the safety of the company's current new car lineup are dissipating even as the number of recalls rise.

While dealers report some wariness from owners of GM cars, they say GM's mounting recalls - the 15.8 million vehicles globally recalled in 2014 is more than last year's total U.S. new car sales by all manufacturers -- are not stoking fears.

Nearly two months ago, after her Texas dealership had missed its own March sales target, Ancira Motor Company Vice President April Ancira told Reuters that it would take time for GM to gain back lost customers and that Chevrolet was "suffering". This week, she said that dealership traffic had rebounded from a dip and customer worries have waned. Once-frequent concerned customer calls have declined to a call or two a week.

"There are still a few customers concerned about safety, but GM has really stepped up to the plate," she said, citing free rental cars for customers waiting for repairs to Chevrolet Cobalts and other models with defective ignition switches, the highest profile recall linked to 13 deaths. GM's U.S. recalls, 29 this year, show its concern with safety, she said.

Investors have been less relaxed. GM stock is down almost 20 percent this year and the company has announced $1.7 billion in recall-related charges in the first two quarters.

In its latest announcements this week, GM recalled 2.6 million vehicles due to possible faulty seat belts, transmissions, air bags and fire issues, and another 284,000 to address a potential fire hazard.

In previous surveys by Reuters, dealers reported a barrage of customer calls with questions about the safety of their cars, especially the 2.6 million vehicles, including Saturn Ions and Cobalts, recalled for the ignition switch defect linked to the deaths.   Continued...

 
The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009. REUTERS/Jeff Kowalsky/Files