Apparently, the 29 million vehicles recalled by General Motors this year is not enough to dissuade customers from buying new cars from U.S. automaker. With the first half of the year now over, GM says it has reached its best sales figures yet since 2007.
In a statement posted on its website Tuesday, GM announced that it sold 1.46 million cars and trucks in the first six months of 2014, up by 1.2% from the 1.42 million vehicles sold in the same period last year and going against analyst expectations of a 2.6% decline. Last month, GM sold a total of 267,461 vehicles in the U.S., which is around 20,000 more units than the expected 247,767. On an adjusted selling-day basis, this amounts to a 9% increase for all GM retail sales and 10% for fleet sales.
"June was the third very strong month in a row for GM, with every brand up on a selling-day adjusted basis," says Kurt McNeil, GM vice president of sales operations in the United States. "In fact, the first half of the year was our best retail sales performance since 2008, driven by an astounding second quarter."
The positive figures come as a result of soaring sales for GM's Buick brand, which the company says had its best June since 2006. Sales of Encore went up by as much as 82%, with LaCrosse sales following with a 33% increasing. GMC also had its best June in eight years, with the redesigned 2014 Yukon more than doubling the figures with sales up by 120%. Sales of GM's Chevrolet Tahoe and Suburban vehicles were also up by 93% and 73% respectively.
The news comes just one day after the company announced six new recalls involving 7.6 million vehicles from as far back a 1997 that have defective ignition switches that can unintentionally rotate the key.
Analysts believe the growing sales numbers are due to the fact that the recalls are forcing millions of people into dealerships where they get to admire the latest models on display in the showroom while mechanics work on repairing their older cars.
"The hardest part of selling is getting people in the door," says analyst Jesse Toprak of Cars.com. "Multiply that by millions of recalls and that's a lot of people coming to the dealership."
That and a $500 incentive to owners of recalled GM vehicles who would like to buy or lease any 2013 Buick, GMC, Cadillac or Chevrolet model. Also, an auto researcher website reports that trade-ins for the Chevy Cobalt unsurprisingly rose by 21% from March to May of this year, but what's surprising is that almost half of Cobalt owners who traded their cars in decided to a buy a new GM vehicle afterwards.
"GM has done a good job communicating new-car deals to affected Cobalt owners, many of whom were probably getting close to buying a new car anyway," says analyst Jessica Caldwell.