General Motors reported Tuesday that February sales of its four core brands were up 32% over February 2009. Overall domestic GM vehicle sales 11.5% including four brands the company will no longer sell.
The company cited huge gains in the sales of its small SUV and crossover vehicles for the big year-over-year gains in its Chevrolet, GMC, Buick and Cadillac brands. Sales of the Chevy Equinox, the GMC Terrain and the Cadillac SRX jumped 198% year-over-year over the models they replaced.
"Although we've been operating as a new company with four brands for just seven months, our February results demonstrate that our long-term plan is already paying dividends," said Susan Docherty, vice president of sales, service and marketing at GM.
Overall, the company sold 138,849 of the core four brands, up 7% over January despite winter weather that battered several areas of the country during the month.
Dealer inventory in the U.S. stood at 420,000 at the end of February, 30,000 higher than January and 361,000 less than February 2009.
The Cadillac SRX led the uptick in SUV sales with 490% growth over February 2009, followed by the GMC Terrain, which saw sales jump 303%. Buick led the way in brand sales increase at 47%, as sales of its LaCrosse rose 100% over a year earlier. Overall Chevy and Cadillac sales jumped 32% year-over-year as sales of the Chevrolet Equinox rose 121 percent over its predecessor.
The sales news came shortly after the company announced the recall of some 1.3 million vehicles for faulty power steering motors, which could burn out. Among the vehicles recalled are the 2005 through 2010 Chevy Cobalt, the 2007 through 2010 Pontiac G5, the 2005 and 2006 Pontiac Pursuit sold in Canada and the 2005 and 2006 Pontiac G4 sold in Mexico.
The recall stems from an investigation opened by the company in 2009. GM said it notified the National Highway Traffic Safety Administration, which began its own investigation in January after receiving more than 1,100 complaints of loss of power steering assist. According to a release from GM, 14 crashes and one injury have been blamed on the power steering issue.
"After our in-depth investigation, we found that this is a condition that takes time to develop," said Jamie Hresko, vice president of quality for GM. "It tends to occur in older models out of warranty. Recalling these vehicles is the right thing to do for our customers' peace of mind."
Hresko assured drivers of the recalled vehicles that while the car would take more effort to steer in the event the power steering assist fails, the car can still be safely controlled.
The recall comes during a time of heightened awareness of auto safety as Toyota Motors Inc. (TM) has been the subject of a Congressional investigation after its own recall of several million vehicles.
Toyota is also indirectly involved in the GM recall as JTEKT, the parts maker that produces the GM power steering motor, is 50% owned by Toyota.
Early Tuesday, Toyota announced sales incentives in its vehicle line, a move that was quickly matched by GM. Both companies announced 0% financing for 60 months on several models during the month of March. GM will also offer 0% financing for 72 months on its remaining 2009 inventory.
Shares of Toyota were up just under 1% in Tuesday morning trading.