GM has announced that it will no longer report monthly sales. Effective 4/3/18, the automaker will now issue quarterly reports instead. Quarterly reports will be available upon the close of each quarter moving forward. The reasoning behind the switch is primarily to provide more accurate sales data and trend analysis that can be wildly affected by short term swings in the market. There is also a desire to offer a more polished image to Wall Street.
The decision to change was not arrived at lightly. Research and feasibility studies have been ongoing for several years now. GM is following suit with companies such as Amazon Inc., Apple Inc., AutoNation, John Deere, Penske Corp., Walmart Inc. and Whirlpool Corp. — all of which do not report sales on a monthly basis. California electric vehicle manufacturer Tesla Inc. also reports quarterly sales instead of monthly results.
In the auto industry, monthly sales are subject to many issues that make them more volatile than quarterly sales. These issues include product launch activity, weather, other seasonal factors, the number of selling days and incentive activity. Quarterly sales reporting helps to even out the peaks and valleys and offers a more accurate view as to the state of things.
“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” Kurt McNeil, U.S. vice president of sales operations, said in a statement. “Reporting sales quarterly better aligns with our business, and the quality of information will make it easier to see how the business is performing.”
Some Things Won’t Change
GM has indicated that the change to quarterly reporting will not affect dealer monthly sales reports. Dealers will still be required to close out monthly sales as usual. It will remain to be seen if the change in reporting will affect other factors such as incentive cycles and monthly dealer bonuses.
Although GM will not release public reports every month, they will still be required to continue reporting monthly sales data to the U.S. Federal Reserve, other government agencies and industry associations across the globe. However, that data will not be made public.
Reactions from the Automotive World
Mark LaNeve, head of U.S. marketing, sales and service for Ford Motor Co., said GM’s move is “pretty significant for the industry.” He said Ford will assess GM’s quarterly reporting before deciding if the company will follow suit.
GM tends to be a trendsetter when it comes to reporting. Five years ago, GM made the decision to stop reporting North American production data. Fiat Chrysler has followed suit on that front. It is expected that other manufacturers will eventually follow suit on quarterly sales reporting, especially if results from the change seem favorable over the coming months and years.
Sometimes change takes time, however. Chrysler Corp. eliminated 10-day reports in 1991, but it took GM until 1994 to follow suit. Chrysler simply decided to do monthly reports, and eventually, all manufacturers started doing it. With the drastic fluctuations that can occur from month to month, it is logical to assume that all manufacturers will likely see the same benefit GM sees and will move to a quarterly reporting format.