General Motors Corporation (NYSE:GM) has performed a remarkable turnaround from the dark days of just five or six years ago, and the company is clearly a viable concern today. That said, GM has not been able to keep up with its rivals Ford Motor Company (NYSE:F) and Toyota Motor Company (ADR) (NYSE:TM) in sales growth, especially in the second half of 2013.
General Motors’ sales
The U.S. auto market has been strong for some months, and that has kept General Motors Corporation (NYSE:GM)’s slippage relative to its peers from being as noticeable. However, according to the New York Times, General Motors’ U.S. sales only increased 7.6% from Jan. to Sept. 2013, whereas Ford Motor Company (NYSE:F)’s sales were up 12%, and Chrysler’s sales increased 8.7% during that same period. Furthermore, General Motors reported a 17.3% U.S. third-quarter market share, dropping from 17.6% a year ago. September 2013 sales were also down 11% from the previous September
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Of most concern to investors is the fact that General Motors Corporation (NYSE:GM) third-quarter profits only came in at $698 million, a plunge of 53% from 3Q 2012.
There are a few bright spots for General Motors, however. The spring and summer selling season was quite strong overall, and August ended with a strong 22% year on year sales increase. The previously slumping Cadillac and Buick brands also showed a resurgence, clocking gains of 38% and 37%, respectively, in August.
General Motors’s Uncle Chuck – sales report from the field
Morgan Stanley analyst Adam Jonas has been talking with his uncle “Chuck”, a Chevrolet dealer in Canton, Ohio, for a number of years about the current state of the auto market in the Midwest. Unfortunately, the conversation for the week of Nov. 21, 2013 was a little gloomy.
Uncle Chuck didn’t mince words in describing recent sales trends: “Phones aren’t ringing and hardly anybody’s coming in the door. We’re down on last month and last month wasn’t pretty.”
As bad as things may be, Chuck doesn’t fault General Motors for the current slump. He says, “General Motors’ trying, doing everything in their power to help us: Holiday cash, dealer cash, 0% on 2013s…they’re offering a $3,500 rebate if you’re on a competitor lease that ends within 10 months and improved trade-in bonuses.”