High gas prices fuel record Cruze sales

By Burton Speakman



The Lordstown-built Chevrolet Cruze once again has been crowned the nation’s top-selling compact car.

The good news comes less than two weeks after General Motors announced it would invest $200 million into its plant here to develop the next-generation Cruze.

There were 25,975 Cruzes sold in August, which topped the previous highest- selling month of 25,160 in April 2011, according to GM.

The Cruze ranked as the sixth best-selling vehicle in the United States last month.

Two primary factors led to the increased sales, said Kristen Andersson, senior analyst for TrueCar.com, an automotive information website.

“The first was the spike in gas prices,” she said. “The second was a very effective marketing and advertising campaign.”

Typically, small cars experience increased sales whenever gas prices spike, Andersson said.

“It spurred sales for all small cars, but especially the Cruze,” she said.

Once the gas prices level off, so will the sales of small cars, Andersson added. “The Cruze should then return to around 20,000 sales per month, which is a very solid number,” she said.

The confidence pricing — the price on the car is the amount charged — and a 30-day return policy campaigns “have made people feel good” about GM products, Andersson said.

“The company has shown a lot of confidence in their products, and people are responding to that,” she added.

The leaders of both local United Auto Workers unions at Lordstown believe internal competition also has been holding back Cruze sales in the last few months.

The Cruze had been competing against the pricing for the 2012 midsize Malibu, which, after incentives, was being offered at roughly the same price as the Cruze, said Glenn Johnson, president of UAW Local 1112.

Removal of Malibu incentives has put the Cruze in a better position, said Dave Green, president of UAW Local 1714.

Tom Mock, communications manager for GM at its Lordstown and Parma plants, said it was remarkable the Cruze was able to have its best U.S. sales month in less than two years after launch.

“It’s another validation supporting the hard work on customer focus and continuous improvement at Lordstown,” he said, adding, “Chevrolet did a remarkable job promoting all of our cars and trucks during the Olympics.”

One of the better aspects about the sales increase is that GM has accomplished it without a number of incentives, Andersson said.

“Everyone wants some type of sale or incentive when they buy a new car,” Green said. But keeping down the incentives helps protect the resale value of the vehicle for the buyer, he added.

“Consumers’ preferences concentrated on the two extreme ends of the segments in August: small cars and large trucks. They both enjoyed market-share gains — a trend that more or less resulted in a wash from the previous month,” said Jesse Toprak, vice president of Market Intelligence for TrueCar.com.

Two other small cars from GM — the Spark and the Sonic — had record months for sales, and August was also the best month for the Chevrolet Volt, the plug-in hybrid electric vehicle.

“The small-car segment is going to be the most popular segment for the foreseeable future,” Johnson said. “When gas is between $3.75 and $4 per gallon, small cars just seem to fly off the shelves.”

Overall, GM reported August sales of 240,520 vehicles in the United States, up 10 percent from a year ago. August was the company’s best retail month of the year.

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