DETROIT (AdAge.com) -- In the months leading up to General Motors Corp. filing for bankruptcy, executives of the automaker warned that Americans wouldn't buy new cars and trucks from car company in bankruptcy. But GM dealers are reporting a mixed bag when it comes to traffic and new-vehicle sales since the auto giant filed for restructuring June 1. Deals abound and dealers are getting creative; one is even throwing a put "Pontiac out to pasture" and a "Gettin' Outta Dodge" sale.
Joe Self, a Chevrolet and Cadillac dealer in Wichita, Kansas, said May was his best new-car sales month all year. "Our traffic in the first week in June has been normal," he said. "We're not seeing a big business interruption." The Cadillac side of his operation posted its best month in 10 months in May, and Mr. Self said his inventory of the luxury line is getting tight. "We're not getting any worse," he said.
Michael Beggs, general manager of Arizona's Cliff Findlay Auto Group, which handles the Chevrolet, Buick, Cadillac and Pontiac brands, said showroom traffic since GM's filing has been "pretty horrible." The franchisee has seen its new-car sales slip by 20% vs. three years ago and is still profitable, but "we just got to dig a little deeper" to make the sale, said Mr. Beggs. Pontiac, which GM will eliminate, is a tougher sell, though Mr. Beggs isn't too concerned because he only has 14 in stock.
Will Churchill, owner of Frank Kent Motor Co., said his Fort Worth, Texas, operation will launch a "Putting Pontiac Out to Pasture" sale June 10 in local radio spots from McCarthy Cos., Dallas. He has 59 Pontiacs to move with his no-haggle-price sale, which won't generate a profit for his business. "The process is designed for us to relinquish inventory," he said.
Mr. Churchill learned the hard way about clearing out inventory. He was notified by Chrysler in mid-May that his Dodge store was among 789 dealers the auto company would cut loose June 9. A few days later he kicked off a "Getting' Outta Dodge" ad campaign to clear out the 204 vehicles he had in stock. "Chrysler's decision to cancel the Frank Kent franchise left us no other choice but to take a loss," he said, adding that the store sold a fully loaded Dodge Ram Hemi pickup truck that normally retails for $45,000 for $27,000.
The dealer said shopper traffic at his GM showrooms for Chevrolet, Hummer, GMC, Buick and Pontiac has stayed about the same even after the auto giant filed for bankruptcy. The reason, he said, is customers already had anticipated GM's trip to court, although shoppers are now asking his sales staff about vehicle warranties and service.
In fact, May marked the best sales month of 2009 for GM in the U.S., which reported a tally of 190,881 units, down 29% from May 2008. However, for the first five months of the year, GM sold 772,733 units, off nearly 42% from the same period of 2008, according to Automotive News.