DETROIT: US auto giant General Motors has announced that it will cease reporting monthly auto sales, arguing that such a short period does not provide an adequate impression of the broader auto industry or the company’s place within it. The move indicates a step towards more long-term thinking.
A bedrock company in a bedrock American industry, General Motors joins just a handful of boutique car manufacturers, including Tesla, which reject monthly sales figures. According to the Wall Street Journal, every other car company discloses detailed figures, which are taken as a consistent bellwether for consumer behaviour.
“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” said GM’s VP of US Sales Operations, Kurt McNeil, in a statement. The move, Bloomberg observed, follows the company’s decision to stop monthly analyst and media conference calls in January 2014 and the decision in 2013 to stop releasing monthly production figures.
America’s top-selling car company, with 17.6% market share in 2017, General Motors sets a trend that has worried some. CNBC suggested that in 2008, monthly sales reports were crucial to providing a picture of the US economy as it deteriorated.
Instead, quarterly reports “will make it easier to see how the business is performing,” McNeil added. Other large American companies have opted to stop reporting sales on a monthly basis, with the retailer Walmart ceasing the practice in 2008 while Target stopped in 2012.
Though numbers are important for analysts putting together forecasts, IHS Markit analyst Stephanie Brinley agreed with GM that the numbers tend to lack context. “It doesn’t always paint a clear picture of whether a company or given model is doing well or poorly because there is so much variability,” she told the Wall Street Journal, including bad weather, poor availability of a certain model.
It is possible that a relaxation in short-term sales pressure will be a benefit to other areas of the business that require long-term investment for long-term effects. Last year, research from McKinsey Global Institute found that in the years between 2001 and 2014, “the revenue of long-term firms cumulatively grew on average 47 percent more than the revenue of other firms, and with less volatility,” the authors observed.
From a marketing point of view, a shift to a longer-term focus can help to create more effective marketing, by planning for longer-term effects. In October, Les Binet and Peter Field updated some of the findings from their ongoing research into the IPA’s extensive data bank.
Talking about high-research categories, such as cars, Field noted that activation is much easier to achieve, making the role of long-term brand-building “significantly more important”.
Sourced from the Wall Street Journal, Bloomberg, Statista, CNBC, McKinsey, WARC; additional content by WARC staff