Ahead of releasing this month's sales numbers, General Motors has announced that it will start reporting sales quarterly instead of monthly.
“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market. Reporting sales quarterly better aligns with our business, and the quality of information will make it easier to see how the business is performing,” said Kurt McNeil, U.S. vice president, Sales Operations in a statement this morning.
GM cites many reasons for the change to quarterly reporting - weather, product launches, number of selling days, incentives, and seasonal factors.
“It’s not that (GM) doesn’t want to talk about how many cars they are selling or if they’re having a bad month. They’re still going to report everything quarterly,” explained IHS Markit analyst Stephanie Brinley.
“It changes the tone of the story, because with month-to-month results it is difficult to really get a good picture of the industry.”
"I understand the reasons they are doing it. There can be a lot of fluctuation during a month," said Michelle Krebs, executive analyst with Autotrader to Automotive News.
Krebs went onto say that other automakers might consider following General Motors lead. She used the example of Chrysler which ended the practice of reporting sales-figures for 10 days in 1991. Other automakers would follow suit, but it took some time. GM didn't make the switch till 1994.
"What happened was they decided to go monthly, and everybody did it. That would make me believe everybody is going to follow suit and follow GM's lead."
But this move could bring forth some unattended consequences. Monthly sales numbers are used by many people and industries to help gauge the economy. It could also make estimates made by third-parties not fully reflect the automaker’s performance.
“Right now, the market looks at whether someone comes in above or below forecasts. If GM’s sales are estimated monthly, those estimates could be really high and then the results come in lower when you look at quarterly sales. That could have unintended consequences.”
But the inverse - GM posting higher sales numbers than what was estimated - is also true.
One thing is certain, we just don't know how this is going to work out.
GM to Begin Reporting U.S. Sales on a Quarterly Basis
DETROIT – General Motors announced today it will begin reporting its U.S. vehicle sales on a quarterly basis, effective immediately. In 2018, second quarter sales will be released on July 3, third quarter sales on October 2 and fourth quarter sales on January 3, 2019.
“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” said Kurt McNeil, U.S. vice president, Sales Operations. “Reporting sales quarterly better aligns with our business, and the quality of information will make it easier to see how the business is performing.”
In the auto industry, monthly sales are subject to many issues that make them more volatile than quarterly sales, including product launch activity, weather, other seasonal factors, the number of selling days and incentive activity.
GM’s high level of transparency on total, brand and nameplate sales, fleet mix and inventory will not change. The company will also continue sharing J.D. Power PIN estimates for incentive spending and average transaction prices.
The company’s March 2018 U.S. sales will be released today at 9:30 a.m. EDT.