General Motors Management Presents November Sales Conference (Transcript)

Executives

Jim Cain – Manager, Financial Communications

Kurt McNeil – VP, U.S. Sales and Service

Don Johnson – VP, Chevrolet Sales and Service

Ed Peper – VP, Fleet Commercial Sales

Brian Sweeney – VP, Buick GMC

Mustafa Mohatarem – Chief Economist

Mark Reuss – EVP and President, North America

Analysts

John Murphy – Bank of America Merrill Lynch

Brian Johnson – Barclays

Adam Jonas – Morgan Stanley

Colin Langan – UBS

Patrick Archambault – Goldman Sachs

Christina Rogers – The Wall Street Journal

Mike Colias – Automotive News

Melissa Burden – The Detroit News

General Motors Company (GM) November Sales Conference Call December 3, 2013 11:00 AM ET

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company November 2013 U.S. Sales Conference Call.

During the presentation all participants will be in a listen-only mode. Afterwards we’ll conduct a question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded, Tuesday, December 3, 2013. Your speakers for today are Jim Cain and Kurt McNeil.

I would now like to turn the conference over to Mr. Jim Cain, GM Communications. Please go ahead sir.

Jim Cain

Good morning everybody and thank you for joining us. We’ll follow our usual format today with some brief opening remarks and then we’ll have a Q&A led by Kurt McNeil, our Vice President of U.S Sales Operations and we have representatives from all four of our branches here today to help us out.

And before we begin I’ll just remind everybody that our discussion today is covered by our disclosure under the forward-looking statements. And with that said, Kurt will begin.

Kurt McNeil

Thank you, Jim. Good morning everyone and thanks for calling in. Today General Motors is announcing the company’s best November sales in the U.S. in six years. We delivered more than 212,000 units last month driven by a 19% increase in retail deliveries and a 14% increase in total sales compared with a year ago. Not only that we grew our total and retail market share versus last November. Our retail share gain will be more than a full percentage point, we’ll know for sure obviously after the rest of the industry reports their numbers.

The way things are going, the November Star will talk 16 million light vehicles, which might end up being the highest reading of the year. What’s going on in our showrooms today follows the same dynamic that we have seen for the last 18 months or so. Sales are being driven by a convergence of car buying fundamentals that keep getting stronger, the best line-up of cars, trucks and crossovers that we’ve ever offered and great execution by our dealer partners. You can see this in both our retail and our fleet results.

While total fleet was down due to the timing of rental deliveries, commercial fleet sales were up 18% and government deliveries were also up. Small business deliveries were truly outstanding, up 38% versus last November. A big part of that story were pick-up deliveries which were up 76% and midsize SUVs which were up 33%.

Having a deep and broad product portfolio certainly paid real dividends in November. In aggregate, our passenger car deliveries were up 17%, crossover sales were also up 17% and pick-ups, vans and SUVs were up a combined 8%. Now these numbers look even better if you look solely at retail sales, which were about 80% of our business last month. For example, GM’s retail car sales were up 30%, crossovers were up 21% and trucks were up 9% on a same basis.

Here are other facts that show how deep and broad our success was. Cadillac total sales increased 11% and retail sales have grown in each of the last 18 months driven by the success of the new XTS and ATS. Cadillac even increased its sales from October 2013 by 9% which is something very few other brands will manage to do. The all-new 2014 CTS made a small contribution to sales in November since it had limited availability. However it’s making a big contribution to Cadillac’s image as an automobile magazine All Star, one of Car and Drivers 10 best cars and as the Motor Trend Car of the Year.

At Buick, the brand is on track for its best year since 2005 and the team has increased retail sales every month since April of 2012. The new Encore and Verano have been huge factors in the Buick story along with new found momentum behind the redesigned Regal and Enclave.

At Chevrolet, we are achieving something that is eluding some of our competitors. We have put together a showroom full of passenger cars that really play well together. In fact the more new cars we introduce, the better the entire portfolio performs. That’s proof positive that our brand is getting stronger day by day. For example Spark retail sales were up 17% in November. The Cruze meanwhile was up 39% in retail, while Malibu retail sales were up 48%. Finally Impala retail deliveries more than doubled. I should note here that the Cruze, the Volt and the Equinox had their best November sales ever.

On the pickup side of the business, sales of the Chevrolet Silverado, and GMC Sierra were up 12% and 22% respectively. Our light duty mix was up, was about 73% of total large pickup sales and the new 2014 models were 86% of our light duty sales. We are also continuing to see favorable ATP and incentive spending trends in our pick-up business both month-over-moth and year-over-year.

As we look towards December and 2014, we feel very good about the direction of the economy and our all-in momentum. We will issue our formal 2014 sales forecast in mid-January. For now suffice it to say the economy is creating jobs and household wealth, energy costs are dropping and credit is available and affordable. All of this bodes well for more growth in 2014.

With that said it’s now time for the Q&A portion of the call. Joining us are Don Johnson, Vice President of Chevrolet Sales and Service; Brian Sweeney, Vice President of Buick GMC, Sales and Service; Bill Peffer, Vice President of Cadillac Sales and Service; Ed Peper, Vice President of Fleet Commercial Sales and our Chief Economist, Mustafa Mohatarem.

Okay, operator, let’s please take some questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). And the first question comes from the line of John Murphy with Bank of America Merrill Lynch. Please go ahead.

John Murphy – Bank of America Merrill Lynch

Good morning guys. Just a first question on the mid-car segment particularly the Malibu. And we keep hearing about you know increasing incentives in competition and contenting in that segment from everybody, yet the sales are incredibly strong and the Malibu is really knocking it out of the park this month. Just trying to understand really what the dynamics are there that you are seeing in that segment specifically, are there actually a lot of price cuts and increased content without being priced for and how does the Malibu do so well? I mean it was off to a little bit of rocky start last year but it seems like the refresh has helped a lot. I am just trying to understand really what’s going on with the Malibu in that segment.

Don Johnson

Hey John, it’s Don Johnson with Chevrolet. You know I think there’s a couple of things happening clearly it’s you know one of the most, if not the most competitive segments out there in the market right now and I think what you are seeing with Malibu is we were gaining some pretty good momentum as we came to the summer and the refresh has really positioned the Malibu as a serious contender in the market overall. So a lot of it has to do with product, clearly you have to be competitive on your incentives and when you look at what the competitors are doing there are a few of them that are seeing their ATPs drop pretty dramatically. But Malibu has found a pretty good watermark right now with the new refresh and I think we expect to see that continue through the rest of the year.

John Murphy – Bank of America Merrill Lynch

And could you comment on the incentives and the ATPs on Malibu maybe sequentially and year-over-year and what you are seeing in the segment?

Don Johnson

Yeah we’re seeing that in the last I would say four to six months. Malibu ATPs have been pretty consistent and again we reached that consistent level with the 2013 and we have pretty well maintained that with 2014. That contrasts again to some of the competitors who have seen ATPs dropping off.

John Murphy – Bank of America Merrill Lynch

Okay. And the second question maybe on pricing and average transaction prices really incentives across the board. What are you seeing in the market and what actions have you taken? There’s a lot of concern in the market that pricing is deteriorating but it seems like what we are seeing is more sort of seasonal year-end incentives and nothing of too concern. I am just trying to understand what you are seeing, what you are doing on incentives and pricing.

Kurt McNeil

Well John this is Kurt again. I mean you know we have continued to say that we’re going to remain disciplined and I would say that we have been. If you take a look at our incentive spend as a percent of ATP if you look at the latest [TENN] data we’re actually under the industry average which we feel very good about. I think it speaks to the strength of our portfolio and our new launch products and lot of our competitors can’t say that.

John Murphy – Bank of America Merrill Lynch

But do you have any numbers or directional guidance you can give us for ATPs and incentives sequentially in year-over-year for the industry and maybe for GM?

Kurt McNeil

I certainly can for GM. If you look month-over-month our incentive spend as a percent of ATP went down from 10.5% last month to 9.5%, roughly flat of where it was year-over-year. Industry is up a little bit month-over-month 9.4% up to 9.6%.

John Murphy – Bank of America Merrill Lynch

Okay. And then just lastly on fleet, I think it was a little bit of a weak month and it sounds like it was a lot of timing, are we going to see a big bump in December fleet sales as there’s sort of a catch up at the end of the year?

Ed Peper

John this is Ed Peper. Our commercial deliveries were up 18% which was really-really good performance for us there. The timing to rentals is what caused our sales to be down, we were down about 13% in rental from a year ago and we’re up 4% calendar year-to-date. So there is not going to be a great rush to slam a lot of rental units on in the month of December. For us, both commercial and government were up. Our small business as Kurt mentioned was up 38%, including large pickups being up 76%. So it was a solid month. Again some timing particularly with some of the car models we saw month-to-month on rental.

John Murphy – Bank of America Merrill Lynch

Okay. And then just actually to the last question, will stop it. If we are looking at the Star bouncing around from August 15.1 and two months following 15.2 and now looks like going to be in low 16s and if you look at that volatility obviously a lot of factors that explain the depressed numbers. As you look at the market right now would you gauge the market running in the high 15s as we exit this year solidly and as we think about what might happen next year that would really be the baseline exit rate that you would use as you look at your forecast.

Ed Peper

John if you look at the sales, average after sales over the last four months it comes out roughly $16 million and that’s really where we had it pegged. I mean you know keep in mind there was just so much noise in September and October. September we had late labor days which [inaudible] towards August, you had a very strong month in August then in October we had the government shutdown. So I am really looking at it like over the four months period and saying $16 million appears to be reasonable exit rate for the year.

John Murphy – Bank of America Merrill Lynch

Okay. That’s very helpful. Thank you very much.

Kurt McNeil

Thanks John.

Operator

Thank you. And the next question comes from the line of Brian Johnson with Barclays. Please go ahead.

Brian Johnson – Barclays

Yes, thanks. Just want to follow-up in the car segment and you talked about incentives. Can you maybe talk about what both you are doing and competitors are doing vis-à-vis particularly infotainment, I am thinking of MyLink and On Star and has there been a shift in the strategy from those things being expensive options to being more or less standard equipment and kind of how do you think about using those as ways to gain share in the mid car segments.

Don Johnson

Yeah it’s Don Johnson with Chevrolet again and I would say when we look at the success of MyLink in the market right now we’re definitely seeing much easier usability from the consumer standpoint. I think controls are helping with that and I do think that much like power windows and cruise control became much more common in a broader range of vehicles that’s what we’re starting to see with our Infotainment systems.

Brian Johnson – Barclays

And currently it’s something that you are using to get the average transaction price up or you are pricing it competitively and using it to gain share?

Don Johnson

Right now we have a price for what the consumer values it at the market but we’re seeing a general trend to more content in vehicles. The infotainment would be one of those elements but by all means it’s not the only thing that’s driving up transaction prices and content.

Brian Johnson – Barclays

Okay, thanks.

Operator

Thank you. And the next question comes from the line of Adam Jonas with Morgan Stanley. Please go ahead.

Adam Jonas – Morgan Stanley

Thanks everybody. Was curious if you could give us a bit of detail about the preferred pricing program you are running up to the dealer network or the supplier pricing. Our understanding is it was rolled out I think early last month. I just want to confirm when exactly did it get rolled out, how much of your US network is offering preferred or supplier pricing to consumers and kind of what impact have they had?

Brian Sweeney

Hey Adam, it’s Brian Sweeney, Buick GMC. Between Don and Chevrolet we offered it on a few select models like a KD Enclave, Traverse, it’s just a handful of models we used as part of our black Friday promotion and just overall that was a component of it. We had some good marketing and merchandising around that sales event. We felt pretty breakthrough as automotive manufacturer. A lot were on holiday type focus messaging we closed and our dealers did just a great job getting their heads around and executing a good week and half promotion, so it’s about ten days.

Adam Jonas – Morgan Stanley

Okay so it now been running it’s not like through the whole holiday season it’s now kind of now – it’s been dialed back?

Brian Sweeney

It ended last night.

Adam Jonas – Morgan Stanley

Got it thanks very much and then just may be just a context on the 90-60 supply. And you have a fresh line-up I know 90-60’s is not out of whack with what you’ve done November if you look at the last five or ten years of data. But just I am curious that there is any lumpiness in there any kind of how work on whether that’s higher than you would have liked, given the freshness for the products or is there anything temporarily keeping it upwards at absolutely steady as she goes, thanks.

Kurt McNeil

Yeah Adam it’s Kurt again and we get a lot of questions about inventories and as you look at some of our competitors they are at some very high levels and going back to ‘06 and ‘07 one in particular is as high as they’ve ever been. In our case we are actually down about 10,000 units year-over-year and when you consider the fact that the industry continues to improve like Mustafa said, December’s generally late production month. We actually feel pretty good about where our inventory levels are.

Adam Jonas – Morgan Stanley

Thanks a lot.

Kurt McNeil

Thank you.

Operator

Thank you and the next question comes from the line of Colin Langan with UBS. Please go ahead.

Colin Langan – UBS

Thanks for taking my questions. Any color on the pricing of any pick up I know last couple of months you gave some color around that?

Kurt McNeil

No I think we are still in roughly the same place, Colin I obviously we think we are very much on plan our ATPs. I think we’ve mentioned in the past, roughly $3,000 and that’s obviously very positive. We still haven’t rolled out the entire portfolio from a cap style and power train standpoint. But we think we’re in a pretty good place and pretty much on plan hitting our numbers that we’ve laid out on monthly basis.

Colin Langan – UBS

And just, confirming, I think last month you mentioned some of that 3,000 plus benefit from the mix of having higher crew cab.

Kurt McNeil

Sure we are still running probably about 65% crew cab. It’s come down slightly as a percent of our total 2014 pickup delivery. But as we continue to roll out the double cab, the regular cabs and then get more V6s in the market place that’s where it’s going to continue to move a little bit.

Colin Langan – UBS

And how was the availability I know there were I guess in October some production issues, have those been addressed and is the inventory where you kind of expect it to be at this point?

Don Johnson

Yeah it’s Don John for Chevrolet certainly from the Silverado standpoint we are finding our inventory is well aligned with what we expected in terms of trim mix, cab mix and even engine mix right now.

Colin Langan – UBS

Okay. And just one last question any color on your rental fleet back and what’s the enrollment and has that changed year over year?

Ed Peper

It’s Ed Peper I will take that one. Sorry my mike wasn’t on there. Our rental mix was 12.7% for the month in calendar year-to-date we’re about 16.1 so it was less than it normally is.

Colin Langan – UBS

And what was that last year?

Ed Peper

16.9.

Colin Langan – UBS

16.9.

Ed Peper

Yeah.

Colin Langan – UBS

Okay that make sense, all right thank you very much.

Ed Peper

For calendar year-to-date Colin just to be clear.

Colin Langan – UBS

Okay, what was it last November?

Ed Peper

16.5.

Colin Langan – UBS

Okay, thank you very much.

Operator

Thank you (Operator Instructions). The next question comes from the line of Rod Lache with Deutsche Bank. Please go ahead.

Unidentified Analyst

It’s [Stan Gallops] in for Rod, just a couple of questions on pickup trucks. You know a couple of your competitors were up sequentially October to November which is pretty unusual and we have your market share within pick-ups kind of be fairly weak in September and really strong in October and weak again in November. Like how are you managing volumes kind of on a month-on-month basis? Do you pay attention to market share and if you could give any color on promotional activity towards the end of the month that may have drove some of the sequential increases from your competitors?

Kurt McNeil

Yeah I mean I’ll let the guys talk about the promotional side of it. Obviously we are paying attentions to the numbers, the competitors in some cases been very aggressive and in Ford’s case average transaction prices that are down month-over-month and year-over-year which are speaking to the aggressiveness of the incentive. Having said that we are going to continue to work our plan, launch our trucks and be competitive and disciplined and then work our roll out of our truck’s cab style and engine mix.

So I’ll let the guys talk about from a promotional standpoint what we are doing to take advantage of the bus truck in the business.

Brian Sweeney

Hey Stan, it’s Brian Sweeney I am from GMC side. I mean our promotional platform for Sierra and I think Don said something and Silverado was pretty consistent all month long. When I think the results we had our best months since November of ‘06, our best month for the new truck over 9,000 sales and the new truck kind of drove over 86% of our light duty sales, as Kurt mentioned ATP’s are in good shape, our Denali edition which will help mix obviously two is just now arriving and starting to sell in late November early December. So you’ve hopefully seeing some of our ads and features the various components whether it’s the Cargo or the [Acadia] or the Silverado I mean that’s been our play we’ve been feeling all month long.

Unidentified Analyst

Okay great and can you tell us how are you feeling about your heavy duty pickup and large SUV inventories in front of the launch which comes up within a couple of months?

Don Johnson

Don with Chevrolet. We are selling down our full size utilities as well as our heavy duties nicely I would say a similar story to what we did with our light duty. So we are prepared for the launch of the new ones.

Unidentified Analyst

Okay got it and then just one additional I mean it looks like there is a lot of positives kind of on the retail market share and year-over-year volumes with the lot of your products. Can you share anything with us in terms of how you are doing on the course in term of market share in places where you’ve been weak in the past and any type of conquest information that have that you could share with us?

Don Johnson

Yeah it’s Don with Chevrolet again. I guess I’ll give you a couple of data points. First of all one of our biggest assess markets in the West Coast is LA right now. We are up few tenth of market share on retail. So trending nicely our Cruze is doing very well there and as you know that’s a huge market Volt for us California continues to be almost half of our Volt business.

On the other side of the country we’ve pegged at both three to four tens of share in the New York area. So again starting to see some good gains there with Cruze as well as Malibu. So we are making the kind of progress that we thought our new products would allow us to do.

Unidentified Analyst

Okay great and just to confirm one thing you said light duty pickup mix was 73%of total volume. Was that total, was that just 73% of retail or 73% of your total pickup volume?

Don Johnson

Total.

Unidentified Analyst

Okay alright, thanks a lot appreciate it.

Operator

Thank you and the next question comes from the line of [Etay Macaulay] with Citigroup. Please go ahead.

Unidentified Analyst

Great, thanks good morning. Just wanted to, hoping you can comment on the full size SUV segment. We are seeing a very strong sales particularly for you in the month of November. And also seems like your transaction prices are running higher. Can you just talk about what you are seeing in that segment in particular how that affects your view into 2014 with the new trucks coming in?

Kurt McNeil

Well like you said we are pretty excited about our results our full size utilities were up 14% and if you take a look our transaction prices year-over-year are up over $1,000 and our incentive spend was down about $400. So all real good strong positive trends. I’ll let the guys comment, but I mean obviously fuel prices are low and continue to remain low, that helps in that segment, and even though we are getting ready to introduce brand new additions of those trucks, we deal in that part of the market. And so we are really proud of our current trucks. So all those things add up to great results I think.

Jim Cain

And just a quick comment on [Yukon] 64% of our mix both XL and regular was on the Denali, so that was real good. We are up month-over-month at retail and like Kurt said our dealers are beginning that sell down as we get ready for the new truck and then we do see some interaction once in a while between Acadia but we delivered our best November in our seven year history on Acadia. Our two utilities on the GMC side worked very well together in November.

Unidentified Analyst

Absolutely. As a follow up to that can you maybe comment on your average transaction prices in the platform the full size crossover perhaps you are seeing similar strength there as you are seeing there a full size SUVs?

Mustafa Mohatarem

Yeah I mean if you take a look it’s pretty it’s also pretty compelling, our ATPs were up over $2,200 year-over-year and our incentive spend was down about $600 so it speaks to the strength of those products as well.

Unidentified Analyst

Absolutely. Thanks so much. It’s very helpful.

Mustafa Mohatarem

Thank you. Bye.

Operator

Thank you. (Operator Instructions). The final analyst question comes from the line of Patrick Archambault of Goldman Sachs. Please go ahead.

Patrick Archambault – Goldman Sachs

Yeah, hi guys. Just a couple from me. Number one is can you talk a little bit about the cadence of the products, I know that Thanksgiving [inaudible] within a month so maybe just a little on that and then I just have a follow-up on that.

Kurt McNeil

I mean obviously Patrick the unique thing about the month of November was all of the Thanksgiving and Black Friday activity. The word was out from a Black Friday standpoint and as Don and Brian Sweeney explained I think we did a nice job of going to market with a clear message our dealers were aligned very specific vehicles, very consistent messaging and while we did not get overly aggressive from an incentive standpoint we certainly took full advantage of that and saw some great business results. So a lot of end of the month activity due to that I guess that would be my response.

Patrick Archambault – Goldman Sachs

And that’s just because of timing of the Thanksgiving, nice job?

Kurt McNeil

Yeah.

Patrick Archambault – Goldman Sachs

And then my follow up is just I don’t know if you gave this already but can you give fleet sales both for you guys as well as the industry?

Kurt McNeil

I will start here and Ed Peper can do some color commentary. Our fleet business was actually down a little bit. We were down little over 3% like Ed said mainly due to timing of rental, our commercial business was up 18%.

Ed Peper

I’ll give you the month too; I’ll jump in on the month Kurt if I can. Our commercial fleet which was up 18% versus last November was up 16% versus October, our government business which was up 2% for November was down 2% versus last month and our rental business which was off 12% versus last November was up 16% from last month.

Patrick Archambault – Goldman Sachs

And do you have preliminary ideas…

Ed Peper

I mean approximately, Patrick as obviously not everyone has reported but we are looking at probably our retail saw around 40 million and 2.4 fleet versus October which came in at 13 million like retail and 2.2 million fleet.

Patrick Archambault – Goldman Sachs

Okay that’s very helpful. Thank you.

Kurt McNeil

Thanks Patrick.

Operator

Thank you. And the next question comes from the line of [Ben Claimen] with Thomson Reuters. Please go ahead.

Unidentified Analyst

Yeah hi. I was just hoping to get you guys to talk about so do we look at sort of the aggressive deals that the industry is putting out there the end of the month as one offs because of the holidays or do we need to obviously there has been some talk about whether the industry is turning more to incentives now as the competition is getting tougher in sales and sales growth is slowing. So I was just hoping to get your sort of the view on how you saw the incentive action at the end of the month. Is it the one off or is this the sign of things to come?

Kurt McNeil

Yeah, Ben I’ll start. First of all I don’t think the industry is softening to most of our earlier comment. You got that it could be our highest month of the year quite frankly. If you look at from our approach to month end we would still say that we were pretty disciplined, if you look at the latest [TENN] data I mean we are still below industry average. So I wouldn’t say we certainly executed went to market with a very focused Black Friday event, but a lot of that was getting everyone aligned behind it.

So we are continuing to be competitive but like I said disciplined but our percent incentive spend as a percent of ATP was down month-over-month below industry, obviously a lot of the competitive set can’t say that, some of our big competitors have been much more aggressive, but we see good business. The industry continues to grow slow steady growth, we don’t see that letting up as we get end of December and flow into 2014. And so we will continue to pick our spots but stay disciplined and competitive.

Unidentified Analyst

Yeah I am not questioning your guys are disciplined but when I am looking at the numbers I don’t have the rest of the year in front of me but I don’t remember all of the other players basically beat handily sort of what Wall Street and the various people that predict sales were expecting by large margins and I don’t remember that’s happening before this year. So the doubter or the skeptic would say what’s driving these really strong sales and everyone talks about the super aggressive deals that were out there and so the question is again is this going to be more sort of more profit sapping deals going forward?

I am not questioning the sales themselves okay I understand that you guys see like a $16 million rate exiting the year but like is it a good $16 million, is it a strong $16 million or is it a 16 million driven by continued aggressive deals?

Mustafa Mohatarem

Ben this is Mustafa. When you look at the underlying economic factors, the labor market has really stabilized, households net worth is at all-time high, interest rates are low, oil prices which means the gasoline prices have fallen and in many states are now below $3 a gallon. Those are all really good drivers of vehicle sales. When you add on top of that excellent new products and I think Kurt has been emphasizing how many of our new products are doing exceptionally well in the market place, it’s not a surprise that we’re ending up with strength when you take away all the noise that’s been in the background this last four months.

But the bottom line is, that the competition is along the products it’s now much more so than on price. And that’s fairly typical at this stage of a cyclical recovery that you begin to see much more competition in the product front because companies have had ample opportunity now since the recovery has started to come up with new products, new attractive products.

Kurt McNeil

And Ben I mean I will give you a couple of data points if you look at industry incentive spend as a percent of ATP, the industry was roughly at 10% in Q1, 9.9% in Q2, 9.9% in Q3. So that would speak while some of – there is variation obviously from some of our competitors no question, that’s pretty stable.

Unidentified Analyst

Okay. Thank you.

Mark Reuss

Hey, Ben, this is Mark Reuss. Let me just tell you something here, if you look at inside of when people change over model years and when they have to sell down and then you look at that not on a monthly basis but on an overall basis here, if you are a company that has the best product you live through those 30 day cycles and you don’t over incent on a monthly basis just because you have a sales call and you have got a market discussion here like we are having today. If you have position of strength in the product and the service and the dealership experience which we have been investing in for the last four years to build these brands back with great products and great showrooms that’s why we are doing it.

I mean you can look at that on a company basis and see who has to incent to make market share every month or you can look at this at the long-haul and say, we have beaten the estimates because we’ve got a total value experience and we don’t have to rely solely on incentives and matching people in the defensive mode and I think if you saw the company before bankruptcy that’s largely how it operated. So now this is a fundamental change that you are seeing here at least in our case. And again I think Kurt’s first comments on the industry is, this is not a purely incentive fueled industry right now. It’s not. The data would say that it’s not so just couple of comments.

Unidentified Analyst

Thank you.

Kurt McNeil

Thanks Ben.

Operator

Thank you. And the next question comes from the line of [Tim Higgins] with Bloomberg News. Please go ahead.

Unidentified Analyst

Thank you and happy Thanksgiving belatedly. I appreciate making the time. I wondered if maybe you could kind of rank or give some color on how important Black Friday is, is it the best sales day of the year so far or is it among the best, that sort of thing. I am also wondering, how is that as a marketing tool the idea of Black Friday kind of evolved for the auto industry in recent years, is it becoming more important tool?

Kurt McNeil

Yeah, I think Tim it’s obviously becoming a bigger go-to-market strategy in automotive, a little more consistent with other industries. In our case, we had a very well thought out well planned out executed event, right. A lot of it is getting everyone aligned not only here in headquarters but our field force, our dealer body behind a consistent go-to-market strategy. We didn’t blow our brains out with any ridiculous incentives, we picked some select vehicles we ran it for a roughly 10 day period and we saw some really good results as a result of that. So and now we are moving on. So I think from our standpoint it was very successful and the right way to go to market.

Unidentified Analyst

Thank you.

Kurt McNeil

Thanks Tim.

Operator

Thank you. The next question comes from the line of Christina Rogers with The Wall Street Journal. Please go ahead.

Christina Rogers – The Wall Street Journal

Hi guys. Thanks for taking our questions. I just got two here. One, are you kind of feeling any pricing pressure from the Japanese and if so, where? I mean we have heard from Ford that it’s start to moderate production on Fusion Focus because of that and also what is your outlook for production in the first quarter, are you going to be dialing any of that back as well?

Kurt McNeil

Well, I will start with the production question Christina. Right now, like I said earlier we feel like we are in a pretty good place from an inventory standpoint going into the month of December and year-end, we are actually down a little bit year-over-year, while some of competitive set are at very high levels, historic high levels, but we feel like we are in a pretty good place. So any adjustments we make are going to be minor tweaking which we do each and every month, so nothing significant.

As far as the pricing pressure I don’t know if Don has got any comments from a mid-sized car standpoint and what he is seeing.

Don Johnson

Yeah, it’s Don again here Christina. I mean I would say in general every competitor out there is trying to get their share of the market and they are doing different things in different segments with pricing and incentives. The Japanese which you mentioned certainly are big part of that game whereas a number of years ago they probably wouldn’t but we look at them as any other competitor and react as accordingly or plan as we need to stay competitive. I wouldn’t say there has been any one or two things that have caused us to significantly change our strategy in the last couple of months due to any pricing moves they have made though.

Christina Rogers – The Wall Street Journal

Also do you have any extended shutdown planned over the holidays at any of our plants?

Kurt McNeil

Yeah, nothing out of what we would consider normal Christina.

Christina Rogers – The Wall Street Journal

Okay, so nothing beyond a week’s shutdown?

Kurt McNeil

Correct or anything that we’ve got time, yeah, it’s all pretty much what we have normally planned correct.

Christina Rogers – The Wall Street Journal

Okay. Thank you.

Kurt McNeil

Thank you, Christina.

Operator

And we now have a question coming from the line of Mike Colias with Automotive News. Please go ahead.

Mike Colias – Automotive News

Yeah. Thanks for taking the question. Just one follow-up on pick-ups, have your competitors backed off the incentive somewhat moving into the ‘14 models and is there any data on how your incentives spend might compare to the competition?

Kurt McNeil

Well, I am looking here I mean, the data that we have which say, no they have not backed off roughly up year-over-year and month-over-month. Meanwhile, our incentive spend is down year-over-year and down month-over-month. So…

Mike Colias – Automotive News

Specifically are full-sized pick-ups down month-over-month?

Kurt McNeil

Yes, yes Mike.

Mike Colias – Automotive News

Okay. And just one quick one on pricing I mean what’s your expectation for the pricing environment going into 2014, I mean it seems like it’s been going up for the long time now I know from Mark’s comments you guys feel like you are in pretty good shape to protect pricing because of all the new products but industry wide would you expect it to be able to sustain where it’s at now, does it go up from here?

Kurt McNeil

I guess I would say that with the continuing strengthening of industry obviously we are trying to stay as disciplined as possible on the incentive side. Obviously every time we introduce a new produce, launch a new product there is opportunity but it’s still going to be a very competitive space as well, Mike. So segment-by-segment we are going to do what we have to, to remain competitive, but stay disciplined in the process. So I guess it would depend on individual products.

Mike Colias – Automotive News

Okay. Thanks.

Operator

Thank you. And the next question comes from the line of Melissa Burden with The Detroit News. Please go ahead.

Melissa Burden – The Detroit News

Hi. Thank you. I just had a couple of truck follow-up questions, did you, if you said this and I apologize if I missed it but could you tell us what does V6 mix was like in the full size pickup truck sales last month?

Kurt McNeil

Melissa it was about over roughly 15%.

Melissa Burden – The Detroit News

Okay. And did you guys last month have any I guess special incentives on the V6 trucks I mean in particular to a V6 versus V8?

Don Johnson

Yes, Don with Chevrolet. Yeah, we did put few extra dollars on the V6. It’s all part of our strategy. We are training our dealers teach them and the customers about the great performance on our new V6.

Melissa Burden – The Detroit News

Can you tell us any specifics on what that was and has it ended or is that something continuing in December?

Don Johnson

It will probably continue but if you want any more background on that I know Jim said that he can chat with you offline.

Melissa Burden – The Detroit News

Okay and then just another question on the 6.2 liter on V8 when will that be hitting showroom?

Don Johnson

It’s out there right now.

Melissa Burden – The Detroit News

Was it a recent or…?

Don Johnson

Yeah last 30 days.

Melissa Burden – The Detroit News

Okay. Alright, thank you.

Kurt McNeil

Thanks Melissa.

Operator

Thank you. And we have a question coming from the line of [David Villa with Awards Auto]. Please go ahead.

Unidentified Analyst

Hi. You had mentioned early about the Chevy passenger car business and how you have added models but actually expanded the total volume meaning you are not cannibalizing one with the other and I wonder if you could talk a little bit about what you are seeing there you know what are the key factors in that success and also how big an impact, is it buyers coming from discontinued brands like Saturn and Pontiac, are you able to retain them in that segment?

Don Johnson

Yeah it’s Don Johnson with Chevrolet. I mean as Kurt said in his remarks overall as we have added you know an all new Cruze and an all new Sonic and then a Spark which we have never seen before to complement you know the Malibu we have now and when you look across our car portfolio the oldest or most senior member is the Cruze which is pretty amazing given the record performance we’re still seeing there. So it really is all of those vehicles being number one in their segment in so many dimensions. We’re seeing good conquests particularly again on Sonic, Spark, particularly on Volt. So the car portfolio I would say is really doing everything that we had wanted it to do right now and that’s why Kurt mentioned it in his opening remarks.

Unidentified Analyst

YOU KNOW are you seeing conquest from other brands as a bigger factor or retaining former GM customers?

Don Johnson

We are actually seeing both. Again when you look at the percent of non-GM brands, brand owners coming into Spark, Sonic and Volt it’s close to over 50%, we are getting some of those buyers in from discontinued brands. We’re seeing a good share from other brands.

Unidentified Analyst

Okay, thanks.

Kurt McNeil

Thank you, David.

Operator

Thank you and Mr. Cain there are no further questions at this time. I will now turn the call back to you. Please continue your presentation with closing remarks.

Jim Cain

Well, everybody thank you for joining us today. If you have any follow-up questions you can reach me in the office, email or phone, I am happy to give you the information you need. Thank you.

Operator

Thank you ladies and gentlemen. That does conclude today’s conference call. We thank you for your participation and ask you to please disconnect. Have a great day.

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