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GM: Revenue Up, Marketshare Down
22 July 2004
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GM posted close to a 50% surge in earnings in the second quarter, from $879 million in 2003 to $1.3 billion this year. Like Ford, the majority of its revenue came from the financing arm. Unlike Ford, GM’s auto operations improved dramatically year-to-year and pulled in a more substantial chunk of the final revenue: 39%. Yet GM execs were not entirely happy with results. 2Q earnings report material is available here. | |
(Click on any chart to enlarge.) To the right is a plot comparing financing revenue and revenue from auto sales on a quarter-to-quarter basis. GM clearly did much better on the auto side this quarter, even given that it had a bad sales month in June. |
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Europe is clearly the most troubled spot in revenue for GM. GM’s success in China is driving its improvement in Asia-Pacific, and the Latin America-Africa-Middle East region also improved greatly year-to-year. Europe is probably in for some restructuring. |
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In terms of marketshare, GM lost 1.2 percentage points in the US, the largest single market; 1 percentage point in North America; and 0.2 percentage points globally. In the US, GM truck sales as a percentage of total sales increased 1.2 percentage points from 59.3% to 60.5% |
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It’s no wonder GM execs were dissatisfied.
From the Detroit Free Press:
Overall, [GM CFO John] Devine struck a more cautious tone than he did at the beginning of the year, when he and other GM executives expected stronger auto sales, improved market share and slowing incentives. Overall sales have held strong, but GM’s share of the industry is down and incentives are headed up again.
“I think on the margin, he’s not as optimistic as he has been in the past,” said [Daman] Blakeney [an equity analyst for Victory Capital Management]. “The whole environment is more challenging for GM. Their trucks are one year older. There is more competition. Interest rates aren’t as favorable as they were.“
GM indicates that the first week of July seems to have better from a sales point of view—incentives kicking in again. It will be interesting to see how the rest of the summer goes for the vehicle sales mix, given ongoing strength in oil prices and the advent of new hybrids from Toyota, Honda and Ford. If I were GM, I’d want to be emphasizing something besides my strength in trucks and SUVs.
July 22, 2004 in Market Background, Vehicle Manufacturers | Permalink | Comments (0) | TrackBack (0)
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