General Motors’ Saturn, Hummer and Saab brands aren’t quite dead yet, but some dealers are curtailing vehicle orders as if they were. Showroom traffic has slowed to a trickled since GM announced the three brands were up for ‘strategic review’, giving Saturn, Hummer and Saab dealers little incentive to order new vehicles.
February sales were dismal for all three brands, with Saturn posting the best month with a 57 percent sales decline. Hummer and Saab saw sales dip 68 and 62 percent, respectively, during the month of February.
As such, many dealers have virtually stopped all vehicle orders. Stocked vehicle inventories aren’t helping, either. “Ordering cars wouldn’t be on my agenda or a lot of other GM dealers. I’ve got plenty,” Dan Jonuska, a Saturn dealer inArizona, told The Detroit News. “People are hearing about Saturn’s future and are looking for huge discounts, going out of business sales.”
That’s bad news for GM on several fronts. Following a massive first quarter production slowdown, GM is planning to ramp up production for the second quarter. However, if dealers aren’t ordering, many of those vehicles could be heading to fleets.
GM’s accounting system also books revenue as vehicles roll off the production floor, not when they are sold by dealers, which could put a chokehold on GM’s cash flow.
However, if GM receives a seal of approval from the government later this month, it could give the auto giant a bit of momentum. But if the news is bad come March 31st, GM could be facing a real uphill battle.
