General Motors Company's Management Hosts June 2013 U.S. Vehicle Sales Conference (Transcript)

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General Motors Company (GM)

June 2013 U.S. Vehicle Sales Conference

July 02, 2013 11:00 AM ET

Executives

Tom Henderson - GM Communications

Kurt McNeil - VP, U.S. Sales Operations

Alan Batey - Vice President of U.S. Sales and Service

Ed Peper - Vice President of Fleet and Commercial Sales

Mustafa Mohatarem - Chief Economist

Don Johnson - VP, Chevrolet Sales and Service

Brian Sweeney - Vice President of Buick, GMC Sales and Service

Analysts

Brian Johnson - Barclays

John Murphy - Bank of America - Merrill Lynch

Rod Lache - Deutsche Bank

Colin Langan - UBS

Adi Oberoi - Goldman Sachs

Ben Klayman - Reuters

Jeff Bennett - The Wall Street Journal

Mike Colias - Automotive News

Nathan Bomey - Detroit Free Press

Ted Reed – The Street

Presentation

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the General Motors Company June 2013 U.S. Sales Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded, Tuesday July 2, 2013.

I would now like to turn the conference over to Tom Henderson, GM Communications. Please go ahead.

Tom Henderson

Thank you and welcome, everyone, to our June sales call. As noted, I am Tom Henderson. I am GM Communications staff. I am standing in for Jim Cain, who normally does this every month. With us today is our Vice President of U.S. Sales Operations, Kurt McNeil, and as we do every month, Kurt will give some remarks and then will open it up for your questions.

If you need any additional information after the call, Please give me or our GM Investor Relations team a call, and we'll be happy to follow-up with you.

With that, I'd turn it over to Kurt.

Kurt McNeil

Thank you, Tom. Good morning, everyone, and thank you for joining us. Today, General Motors is reporting June sales of 264,843 vehicles. That's up 6.5% versus June of 2012, or up 10.6% after adjusting for one fewer selling day this year. This marks our best sales month since September of 2008. Now, you’ll probably recall the same headline from last month and we view that as a good thing. Sequentially, we are up 4.7% from May.

I think it shows you that our products are connecting with customers and we are in an economy that gets a little bit stronger each and every month. If you look strictly at our June retail sales, our headline number is a very robust 13.8% year-over-year gain. All four of our brands posted higher sales and Chevrolet, Cadillac and GMC delivered double-digit gains. This should be enough to drive our retail market share up more than a 0.5 point year-over-year. This will be one of the largest gains among our competitive set.

Total share should be in the mid-18% range. And importantly, we achieved these results with incentives that have been pretty stable on both, on month-over-month and year-over-year basis. As always, we are referring to mid-month J.D. Power's PIN estimates when we talk about incentives and average transaction prices or ATPs.

Our fleet sales were down year-over-year as we told you that they would be during last month's conference call, but they were up more than 11% versus May, mostly due to the timing of customer deliveries. With our fleet sales at 27.4% of our total business this month, we remain very much on track with our full year plan, which is to have fleet deliveries net to about 26% to 27% of our total sales. Finally, the light vehicle SAAR for June, it looks like it will fall in the $15.8 million to $16 million range.

As Mustafa pointed out in our press release, America families are better off than they were at the beginning of the year. They also believe that the economic expansion is going to continue, so they are buying more homes and more cars and trucks. Among the many positive factors that work in the economy are stable gas prices and improving job market and a stock market that's trending up. This all goes a long way towards explaining why the latest consumer sentiment and consumer confidence survey results have been so strong.

When you dig deeper into our results, you can see that the GM story has been remarkably consistent over the last several months. For example, Cadillac continues to grow faster than it has been almost 40 years and Buick just returned its 14 th consecutive month of higher retail sales versus the prior year. Chevrolet also had its best total sales month since September of 2007, including a 66% increase in mini, small and compact car sales.

Looking at the nameplate level, a lot of attention has been focused on our newest products like the Cadillac ATS, the Buick Encore and the Chevrolet Spark and rightly so. All of them are in segments where we didn't compete before and we are seeing strong conquest rates. The results of the all new 2014 Chevrolet Impala which drove a 62% increase in retail sales for the nameplates, but no one should overlook that we have a deep bench of products in the market that have demonstrated tremendous staying power. For example, our redesign mid-crossovers are performing very well. Retail sales of the Buick Enclave were up 24% in the first half of the year, Chevrolet Traverse was up 21% and the GMC Acadia was up 16%.

There may be no better examples of staying power than the Chevrolet Equinox, and the Chevrolet Cruze. It surprises a lot of people to learn that the Equinox deliveries have now increased for 18 consecutive months, despite a lot of new competition. In fact, this past month was its best month ever. The Chevrolet Cruze, meanwhile, also set an all time monthly record with sales of 32,871 units, and then there is our truck business. Trucks are hot. There's no question about it. The housing recovery, stable gas prices and the release of pent-up demand have helped increase the segment share of the industry to about 11.7% in June. That's up two-tenths of a point from May, and about 1.7 points versus last June. This robust demand proves that we made the right call to compensate for launch related downtime by building inventory during the last 12 to 18 months.

As I walk through our truck results, I want to note upfront that about 90% of our large pick up sales in June were 2013 models. This translates to 54,891, GMT-900 deliveries, and about 6,600 2014 light duty models. Combined, that puts Chevrolet and the GMT large pick-up sales up 29% year-over-year. Retail sales were even stronger, up 39%. The retail figure includes full size pick-up sales to small business customers. Those are customers that purchase one to four units at a time and those sales were up 69% for the month. Strong demand has also helped us deliver very robust ATPs in this segment. They are up more than $800 from May, and more than $1,300 from a year ago.

What you see here is a great performance for both. The GMT-900s and the 2014 models. ATPs for the GMT-900s are up about $300 per unit from May and about $750 from a year ago. Meanwhile, the ATPs for 2014 Silverado and Sierra are running significantly higher than the outgoing crew cab models. They are also finding homes in relatively no time at all. Our average days to churn is currently 10 days.

Now that more 2014 models are arriving in dealerships, we are going to start ramping up our advertising. As we announced this morning, Chevrolet will unveil the first 2014 Silverado television ad on Independence Day. It will debut in Texas, where one of every six pick-up trucks are sold in the United States and then roll out nationally as inventory builds across the country.

The spot features a great new song by Grammy nominated country music artist Will Hoge from Nashville, and most of the people who appear in the ad are not professional actors. They are actually Chevrolet owners. We are also undertaking an aggressive grassroots campaign that will leverage NASCAR races, music venues and sporting events. It's going to be hard to miss the new Silverado as time rolls on.

With that said, it's now time for the Q&A portion of the call. Joining us are Don Johnson, the Vice President of Chevrolet Sales and Service; Brian Sweeney, Vice President of Buick, GMC Sales and Service; Chase Hawkins, Vice President of Cadillac Sales and Service; Ed Peper, Vice President of Fleet and Commercial Sales; Chief Economist, Mustafa Mohatarem, as well as, Mr. Alan Batey.

Okay. Operator, let's take some questions.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now pursue with the analyst portion of the question-and-answer session. (Operator Instructions). The first question comes from Brian Johnson of Barclays. Please go ahead, sir.

Brian Johnson - Barclays

Hi. Two questions. One just housekeeping on the numbers on a picture model and second, assuming Alan Batey’s on the phone, congratulations on his new role and just want to ask some details about that. Vis-à-vis the model lineup, it seems to be an offset to the strong month where the large SUVs, Escalades, Suburban, Yukons, all of which were down 10% to 25%, what's your - and it’s certainly not change over time for those yet, so what's driving that?

Kurt McNeil

Yes. From a full size utility standpoint, the total business was down 17%, but retail was only down 3.6%, so it was not a significant reduction on the retail side. I'll open it up to any of the guys here if you want to make a further comment.

Ed Peper

Yes. Brian. It's Ed Peper. The rental sales were down. We actually had some rental sales the customers wanted the vehicles a little bit earlier this year and so the rental sales were down, which contributed to the overall number.

Unidentified Company Representative

And if you look, Brian, I mean, on the ATP side and the incentive side, I mean our ATPs are up almost $2,000 year-over-year, our incentive spend is down a little over $500, still very good business, very profitable business for us.

I'll turn it over to Alan for a comment.

Alan Batey

Hi, Brian. Do you have anything specific…?

Brian Johnson - Barclays

No. My question is, in your new role with Chevrolet, if you kind of think of the value chain going from product design through engineering through positioning the vehicle then to marketing execution, you certainly have control of the marketing execution and advertising levers worldwide. How far back does role to the concept design and engineering stretch and then how will that likely evolve?

Alan Batey

All the way back, Brian. I mean, at the end of the day at the heart of the brand has to be great product and getting the voice of the customer into the product development process is vitally important and so yes, we are going to spend a lot of time on product portfolio and really build it up from the [product] [ph].

Really, the pillars that I believe are going to build the brand and build profitable growth globally is going to be product, obviously at either network, our facilities, our customer experience and then of course our marketing. So, we are going to look at this from a complete 360 perspective and really build a portfolio of product that is really relevant and exciting for our customers.

Brian Johnson - Barclays

How do you reconcile? If you look at Europe and China, you are bringing in Chevrolet arguably versus Skoda is right now in the VW portfolio, whereas in the U.S. you have been successful moving Chevy a bit more upscale, with things like the Malibu and then you have that big truck focus, obviously in the U.S. So, how do you kind of create a cohesive global product or brand image around that?

Alan Batey

Well, I mean, we want to stand for great value in every market where we are represented, but the portfolio could be different depending on what the markets are, so we've shown with vehicles like the Cruze, where we've sold over 2 million now globally that we can use as scale and we can operate on a global basis, but there are markets where we will have potentially lower cost vehicles which meet those customer requirements. So, it's not going to be one size fits all. It's going to be very carefully crafted and again put the customer in the middle of everything we do.

Operator

Thank you. Our next question comes from John Murphy of Bank of America - Merrill Lynch. Please go ahead.

John Murphy - Bank of America - Merrill Lynch

Good morning, guys. Just a question on pricing, everybody seems to be very fearful that the bottom’s is about to fall out on pricing despite the fact that it's remained very resilient. I am just curious as we look at supply relatively constrained and demand rising, why anybody in their right mind would actually cut pricing right now? Is there anything that you see in the market or anything that you would view sort of strategically that would drive you to cut price in this kind of environment?

Mustafa Mohatarem

John, this is Mustafa Mohatarem. As you said, pricing is going to be driven by the supply/demand balance, and right now demand is very strong. Supply still remains somewhat constrained, so I think the likelihood of any kind of a price competition is pretty low at this point in time. You know, who knows what happens years down the road, but certainly right now the industry is being very disciplined in both the production as well. You know, production is very much in line with the demand out there, so that's a very low probability, John.

John Murphy - Bank of America - Merrill Lynch

Yes. That certainly makes a lot of sense to me. Just a second question as we look at sort of the significant increase we've seen in sales this month, I mean how much of it do you think is driven by just a general uptick in showroom traffic and consumers coming to your showrooms versus a deeper buy by financing companies into the subprime market. And just where do subprime stand as a percentage of your sales at this point?

Alan Batey

Well, on APR, John, the industry in June was 7.3% subprime. GM was 9.6%, so we are leading in that arena, which we've tried to be more aggressive there. On the lease side, it's negligible. The industry is only 1.6%, and we are 1.7%. On a bigger scale, I think once again, we saw housing, the energy industry kind of leading with from a truck standpoint, which bolstered full-size pickups, but because of all the other economic factors that we talked about and Mustafa mentioned the fact that the job state is finally trending positive with stable fuel prices, consumer sentiment and confidence showing positive signs, we think that's finally unlocking the American families' coming in to our showrooms and it's contributing to our car sales and our crossover sales, so I guess that's kind of the way we see it.

Mustafa Mohatarem

Let me just add on the wealth side. With the equity markets back up, home prices rising and the job market stabilizing, you have seen very high rates of growth, but you are also not seeing high rates on layoffs. All of that builds confidence that it's the right time to buy a car.

John Murphy - Bank of America - Merrill Lynch

So, it would be a fair characterization to say the bulk of what you are seeing in your dealerships and your sales increases is result of just pure fundamental demand not a change in financing tactics at by any finance companies at this point?

Mustafa Mohatarem

That's generally true.

John Murphy - Bank of America - Merrill Lynch

Okay. Great. Thank you very much.

Operator

Thank you. (Operator Instructions). Our next question comes from Rod Lache of Deutsche Bank. Please go ahead, sir.

Rod Lache - Deutsche Bank

Good morning, everybody. Could you just talk a little bit about just on that T900 to K2XX transition? You did disclose the inventories of the T900. What was it for the K2XX at the end of the month, and what is the sell-down strategy exactly? We saw the J.D. Power PIN data disclosing kind of an overall moderation of pickup incentives. Were they also down on the T900?

Alan Batey

Yes. Rod, we'd kind of get to your number here. Dealer stock on the K2XX light-duty crew was roughly 38,000. A lot of that was in transit. I mean, retail stock was under 20,000 units. And, as far as the incentives spend they are with me here. The incentive spend was 260.

Rod Lache - Deutsche Bank

Is that month-over-month?

Alan Batey

Yes. Rod, I guess I'd give you a specific breakdown. We'll follow-up with you. I mean, if you look at pickups in general which I have here, our incentive spend was up. It was relatively flat year-over-year. It's up $39. Month-over-month, it was actually down about $460. Meanwhile, I think I quoted our ATPs. Our ATPs year-over-year are up $1,300. Month-over-month, up almost $900, so ATP is up very strong both, year-over-year and month-over-month with relatively minor changes in incentive spend. We'll get you what you need broken down '13 versus '14.

Rod Lache - Deutsche Bank

It just seems either the percentage of your sales that were K2XX at this point, could possibly have accounted almost $500 decline in incentives, sequentially? So, would you agree that it's moderating pretty much across the board, even on the older vehicles?

Alan Batey

Yes. I think that's fair. I think it speaks to the opportunity, the growth, the demand that's out there. And then selfishly, we feel very good about the plan that we've been working here for 18 to 20 months about the right amount of availability of old versus new trucks.

Rod Lache - Deutsche Bank

Okay. Just in terms of broadly you've all been watching the benchmark grade seems a little bit higher here over the past few weeks. Is there any indication that that's getting pass through into retail financing rates or is that something that just it seems to be getting managed by banks and campus?

Alan Batey

No evidence of that, Rod.

Rod Lache - Deutsche Bank

Right. Lastly, just, Alan, again congratulations on your new role. Could you just talk a little bit about how you are positioning the Chevrolet primarily in Europe versus the positioning of Opel? Is the plan to bring Chevrolet up to compete more directly or is there a weighted distinguish the customer that one is targeting versus the other?

Alan Batey

Yes. Thanks to your congrats first. Look, obviously in Europe, we have started to see the first [green shoots] at what's happening at Opel and Vauxhall. Now at new Mokka and new ADAM (Inaudible) are doing extremely well and are starting to generate some real excitement in the brand. We need to rebuild the brand. We know that. And as we do that, that gives us the opportunity to move Opel and Vauxhall up a little bit, which creates potentially a value opportunity.

So, Chevrolet is a very much going to be a value play, and we believe that the two clients can coexist and can work well together. Very similarly to the way in the U.S., we've got four brands and talk about streamlined and we talk about where they compete and we try and make sure we have this little overlap as possible, so more to come on this as we look forward.

Operator

Thank you. Our next question comes from Colin Langan of UBS. Please go ahead, sir.

Colin Langan - UBS

Great. Thanks for taking my question. Can we kind of move on the industry pickup incentives response and where any of your competitors more aggressive in that segment. And also, can you just clarify whether you gave some numbers on your incentives. Does that include the cost of the maintenance that you added?

Kurt McNeil

The industry, Colin, if I understood you right, the industry was down about $100 from an incentive standpoint and everybody was kind of in that month-over-month. It was everybody within that space. Everybody was, I guess, you would say trying to remain disciplined transitioning to '14 model year, but there wasn't anything out of line that we saw there. Then on the maintenance question.

Don Johnson

Sorry. Don from Chevrolet. Yes. Typically J.D. Power doesn't pickup that costing incentives.

Colin Langan - UBS

Okay. And, any color on overall incentives? I know you commented on the pickups.

Don Johnson

Yes. That was overall, Colin. So, down about $100 month-over-month. Industry down about $100 or so year-over-year, industry.

Colin Langan - UBS

Okay. So, you weren't talking about in pickups in particular. Okay. Thank you very much.

Operator

Thank you. Our next question comes from Chris Ceraso of Credit Suisse. Please go ahead, sir.

Unidentified Analyst

Hi. This is (Inaudible) to fill on for Chris. I guess. I wanted to follow-up on the pickup truck discussion earlier. I mean, inventories were down quite a bit this month. I am just wondering to what extent GM to be at risk of really running low on inventories. By the time you get to the fourth quarter, given that we are kind of in the [hard] to change over at this point now and pick up sales were seasonally accelerating at this point.

Don Johnson

Well, yes. We feel pretty good about our plan. As we said in previous calls, roughly 50% of our production this year is going to be the new truck, 25% of our sales are going to be the new truck and we have been working this plan for almost 20 months now. We try to stay disciplined on our incentive spend, we try to take into consideration mix, right? Light-duty, heavy-duty and then various cab styles. We think we've worked that into all of our consecutive launch plans, so we feel we are in a pretty good place from an inventory standpoint and a production standpoint. So, we feel pretty positive.

Unidentified Analyst

Okay. And, then I guess just switching gears, could you give us? I don't know if you mentioned this, but could you give us your overall average ATP in the month and how that trended year-over-year, month-over-month. Then also just to what extent has the improvement in your ATP been driven by your product mix by the strong pickup truck sales versus either series mix or just underlying base price increase. If you can just give us some color there?

Don Johnson

Okay. I think your first question was about our overall ATPs.

Unidentified Analyst

Yes.

Don Johnson

So, our overall ATPs year-over-year were up $563, so I think that answers that. As far as the growth of our ATPs, probably about a third of it is due to mix and the other two-thirds is within the products.

Unidentified Analyst

Okay. So, the energy there is like series mix or any kind of shift in trend things like that.

Don Johnson

And, obviously, new products that we've launched. Correct.

Unidentified Analyst

Okay. Thanks a lot.

Don Johnson

Thank you.

Operator

Thank you. The following question will conclude the analyst portion. Following this question, we will proceed with the media portion of the question and answer session. (Operator Instructions). And our final analyst question comes from Adi Oberoi of Goldman Sachs. Please go ahead.

Adi Oberoi - Goldman Sachs

Hi. Great. Thanks a lot. I had one quick clarification. You mentioned that your retail sales were up 13.8% year-on-year. Was that adjusted for selling days or unadjusted number?

Don Johnson

Good question. That was not adjusted. Retail was up 13.8%. On a selling day adjusted basis, it was actually up 18.1%.

Adi Oberoi - Goldman Sachs

Okay. Thank you. And, I had another question regarding your market share. I know on one of the previous sales calls you have had mentioned that GM was targeting 18% market share this quarter, and based on what we see so far it seems you kind of overshot that target. Any thought on where the outperformance came or where you guys are little bit underestimating?

Don Johnson

Obviously, the total number ebbs and flows based on the various pieces of retail versus fleet et cetera, we are not formally set on 18%. We obviously want our unfair share and so that's what we try to do each and every month. The fact that we are growing retail share by as much as a half-a-point, obviously we feel very good about that.

Adi Oberoi - Goldman Sachs

Great. Thanks a lot, guys.

Operator

Thank you. Our next question comes from (Inaudible) of Reuters. Please go ahead.

Ben Klayman - Reuters

Yes. Hi. This is actually Ben Klayman. This was for Alan. Alan, I just was interested in your comments about how Opel and Chevy work together and I just wanted to, I guess, get you talking about a little bit more, because there has been cases in the past where the company has tried to move Opel up market and charge more for it and that hasn't worked. Your comment seem to imply that you guys are taking another crack at that and I just wanted to get your reaction to that.

Alan Batey

Ben, I didn't say that. What I said was that we are starting to see the signs of [green shoots] great new product that was launched such as Mokka and ADAM (Inaudible). And of course, when you get desirable product like this in the portfolio, obviously it not only increases sales, but it builds your brand power. That's what I was getting at.

Ben Klayman - Reuters

Okay. I mean, you did say that Chevy was the value play. Correct?

Alan Batey

Chevrolet competes in the value end of the European market. Correct.

Ben Klayman - Reuters

And then Opel is above that or is Opel also a value play?

Alan Batey

Opel kicks above that and basically fits in the mainstream market in Europe.

Ben Klayman - Reuters

Okay. Thank you.

Operator

Thank you. One moment for our next question and it comes from the line of Jeff Bennett of The Wall Street Journal. Please go ahead.

Jeff Bennett - The Wall Street Journal

Thanks. Kurt, just a clarification again on how much was fleet this month?

Kurt McNeil

Fleet was 27.4% of our total sales.

Jeff Bennett - The Wall Street Journal

And again you think it's going to be 24% by the end of the year?

Kurt McNeil

No. Jeff, we've been saying essentially 26% to 27%.

Jeff Bennett - The Wall Street Journal

Okay. Then I was kind of looking for some insight from both yourself and Mr. (Inaudible), and whoever else wants to throw in. Give us a feel going into the second half here. I know people have yet to know off of that 15.5 for total sales for the year, but are you beginning to see signs of that could change that there is strength going into the second half?

Mustafa Mohatarem

Jeff, currently its strength going into the second half as I mentioned, when you look at the customers' balance sheet, it continues to strengthen. Overall, the U.S. private sector has done a great job coming out of this recession on the balance sheet side and especially the household. So, the ability to buy is certainly there. With the employment situation stabilizing, with income growing modestly, I think all points to continuing improvement in the auto market and we'll just have to see how it plays out, but certainly our forecast is that around 15.5 looks pretty comfortable at this point.

Jeff Bennett - The Wall Street Journal

Okay.

Alan Batey

Obviously, Jeff, [sales guys] what I mean given all of the current launches that we have and what we've got in the back half of the year, it can pile up Silverado, the new Corvette, updated Camaro, Encore, Regal and LaCrosse, Buick, Sierra, there's new Cadillac CTS. I mean, we got a lot of ammunition to take advantage of that upsides.

Jeff Bennett - The Wall Street Journal

Okay. And, I guess it sounds like, Alan, that are dealers in the right position right now do you feel or do they still have some older stock they need to get rid of ahead of time?

Alan Batey

Jeff, I would say our inventory is very, very tidy. So, no. We look forward with very tight inventory and I think the model here change is going to be seamless for us.

Jeff Bennett - The Wall Street Journal

Okay. Thank you.

Operator

Thank you. Our next question comes from Todd Lassa from Automobile Magazine. Please go ahead.

Todd Lassa - Automobile Magazine

Thanks. I will try to make one question out what's probably maybe three questions regarding Chevrolet sedan. I wonder if you folks could break out the June sales. How much was the old car and how much the new car and whether you have a diesel breakout on the Cruze. Then also looking at the Cruze that big number you had for June, was that largely weak?

Don Johnson

Yes. Don Johnson with Chevrolet that was three question that you rattled off there. First of all, I think your first question was on the sales of the new Impala versus the previous one. The new model did not sell the old retail sales were about 3,500 for the new one and about 2,500 for the old one. So, I think that was your first question.

Second question on the Cruze diesel, which is really just starting to get out into data lots, we've sold just around 200s or 200 so far. Really well spread across the country too every from the southeast to the northwest in the country, so we are pretty excited about not only the published mileage that obviously we have on the Cruze diesel, but when you get the anecdotal stories in from customers and dealers where they are getting real world in excess of 50 miles per gallon. I think that's telling a really good story.

Then finally, I think your question was on the Cruze increase and how much of that was fleet. Cruze increase this month was actually driven both, by fleet and by retail. Retail sales were actually up at 21%, just about 20,000 units which is a great market for retail for Cruze. That's clearly the result of some timing of big rental business that they helped push the overall rate up to 73%, but we are still within our target of total fleet sales as a percent of our Cruze sales around 23%. So, I think the good month all dimensions is for Cruze.

Operator

Thank you. Our next question comes from the line of Mike Colias of Automotive News. Please go ahead.

Mike Colias - Automotive News

Thanks. A couple of questions for Brian on Buick, I am just wondering what do you see as behind the drop in LaCrosse, and whether or not you guys have so many ['14s] yet?

Brian Sweeney

Mike, I think if you look at all three Buick sedans together right now, we are transitioning into the new car. No, we haven't delivered any '14 LaCrosses yet, but Buick sedans' sales were up 6% over May. Verano did extremely well. Regal sales were up 4% over May. Good ATP, good incentive story on all three cars as well, so all three cars are working pretty strong in the showroom for us and I think we'll have a good sell down and transition into the new LaCrosse here.

Mike Colias - Automotive News

Okay. Then just on the Encore. Are dealers able to get enough of those? I mean, have you increased the amount that you are asking three or four, or can you need more?

Brian Sweeney

Yes. I mean, certainly there's a ton of demand for Encore and our network is looking for more every day. We've actually increased ground stock here in the last week-and-a-half by 500 to 600 units, so it starting to grow and it's going to play big for us here in July.

Mike Colias - Automotive News

Okay. Great. Thanks a lot.

Operator

Thank you. Our next question comes from Nathan Bomey of Detroit Free Press. Please go ahead.

Nathan Bomey - Detroit Free Press

A lot of my questions have been answered, but can you just address both, this month and is it just a matter of the increase, the matter of more leases to more extent is there?

Don Johnson

Yes. It's Don Johnson with Chevrolet. Yes. We had a great both months again up 53%. Really, there has been a bit of month-to-month timing. When you look at the data, you can see that we are up about 12% by year-to-date, which is just about in line with the overall industry. Leasing is actually down a little bit. If you look at our pen spending, you will see it's down on both. What we did do was we did, a lot of our dealers said that their customers were looking for a cash alternative, so we provided that to them and I think that in combination with the overall growth as a market fuel sales this month.

Operator

Would you like to take the next question?

Tom Henderson

Yes. Please.

Operator

Thank you. Our final question comes from Ted Reed of The Street. Please go ahead.

Ted Reed – The Street

Thank you. I would like to ask, with all the advertising for the 2014 Silverado that's coming out, how are you going to be able to convince anyone to buy a 2013 Silverado? Is that all done with incentives?

Kurt McNeil

Yes. I think as we've talked a number of times on these calls, there's few distinct buyers out there often when you do a model changeover and I think the value of the old model, which does have higher [canticles] certainly appeal to some customers, but clearly there are a lot of customers out there that have been waiting and looking forward to the new technology and the new refinement of the new product, so I think that having both offerings out there can be nothing but good news for us and our dealers.

Ted Reed – The Street

And, what's the inventory of the old ones?

Kurt McNeil

We are running on Silverado on ground in 70 days supply for the dealers.

Ted Reed – The Street

And, last thing. Selling them out in 10 days as they come in. Did that surprise you? Did you expect that people stab on that that quickly?

Kurt McNeil

That's difficult when you launch new one or again as I said earlier, a lot of customers waiting for this great new truck, so presently meeting our expectations I would say.

Ted Reed – The Street

All right. Thank you.

Operator

Thank you, Mr. Henderson. I'd like to turn the call back over to you for any closing remarks.

Tom Henderson

Okay. Thank you, ladies and gentlemen. That does conclude our call for today. Have a great day.

Operator

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect all lines. Thank you and have a good day.

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