GM worldwide sales were at their highest level in 27 years

[Marc]

Let me see.... They can't make any money in the US, so.... From The Associated Press

GM says worldwide sales up thanks to Asia, Latin America

DETROIT (AP) — Despite General Motors Corp.'s problems in its home market, the automaker's worldwide sales were at their highest level in 27 years in 2005 thanks to growth in Asia and Latin America, GM Chairman and CEO Rick Wagoner said.

"Getting outside of the U.S. market we had a good year, on balance, around the world," Wagoner said in a transcript of remarks released Saturday by GM.

Wagoner said preliminary sales figures show GM sold 9.2 million vehicles worldwide. The only other year GM sold more than 9 million vehicles was 1978, he said.

The figure raises the bar for Toyota Motor Corp., which is close to surpassing GM in worldwide sales to become the world's largest automaker. Toyota produced about 8.1 million vehicles in 2005 and has announced plans to build 9.06 million vehicles in 2006.

Wagoner said more than half of GM's sales are now outside the United States, and China is the automaker's second biggest market.

GM was particularly strong in Asia, selling more than 1 million vehicles for the first time ever, Wagoner said. GM's market share in the Asia-Pacific region was 5.8%. In 2004, GM sold 887,000 vehicles in the region and had a 5.2% market share.

GM also had its best year ever in Latin America, selling more than 900,000 vehicles, Wagoner said. He said the company is still tallying results in Europe but believes it was a record year there as well.

The numbers are a stark contrast to U.S. sales, where GM lost market share in 2005. GM sold 4.4 million cars and trucks in the United States last year for a market share of 26%. That was down from 27.3% in 2004, according to Autodata Corp.

Wagoner said the Chevrolet brand is responsible for much of the worldwide growth spurt. Chevrolet's sales rose in Asia, Europe and Latin America, he said. The brand now sells more than 4 million vehicles worldwide, or around 6% of all vehicles sold.

Chevrolet sales were down 3.2% in the United States last year, but the brand was still the top-selling brand in America, capturing those honors from Ford for the first time since 1986.

"Some of them you win by hanging around," Wagoner said.

Wagoner said the outlook for the United States and Europe in 2006 is fairly flat and that global growth will be driven by Asian markets.

[Jennifer Kirley]

That's been the largest argument for a global economy--creating global demand for more stuff. Fewer U.S. people are buying GM cars for various reasons, among which is there simply isn't a current need for so many new cars and the payments are getting steep for stagnating salaries...and of course we know why the salaries are getting pressed downward.

So, they are getting just what they went after. This is also the case with cell phones and other merchandise of choice.

But wait! GM is facing bankruptcy given such strong sales?

I am thinking it doesn't pass the smell test. The matter is apparently a means to shed employee costs. We don't get to see how U.S. plants (some of which I read haven't been upgraded for a long time) compare with their foreign counterparts, which are all shiny and modern and perhaps have no health insurance costs at all. We get the "GM is losing money" line and plans to shrink U.S. production.

The downsized U.S. workers are promised retraining. I suggest they might not prefer going into education...just my

[Jim Wynne]

Originally Posted by Marc

Let me see.... They can't make any money in the US, so.... From The Associated Press

Wagoner said,

"Some of them you win by hanging around"

This looks like a variation of the old "Management by Walking Around." Perhaps now it's morphed into "Hanging Around," meaning that you take a nap until some favorable random phenomenon occurs, then leap on it and promote it as the result of an ingenious strategy.

[Jennifer Kirley]

Originally Posted by JSW05

Wagoner said,
This looks like a variation of the old "Management by Walking Around." Perhaps now it's morphed into "Hanging Around," meaning that you take a nap until some favorable random phenomenon occurs, then leap on it and promote it as the result of an ingenious strategy.

Gosh, isn't that somewhere among those 48 Laws of Power?

[Steve Prevette]

Originally Posted by Jennifer Kirley

But wait! GM is facing bankruptcy given such strong sales?

I suspect the issue here is how much profit is being made on each sale. Certainly a company can make a large number of sales, make a huge gross sales figure, but if they can't turn a profit (net sales) then they go bankrupt.

Look at some of the incentives GM has had to give out, and the high amount of advertising. All that cuts into profit.

[Wes Bucey]

Originally Posted by Steve Prevette

I suspect the issue here is how much profit is being made on each sale. Certainly a company can make a large number of sales, make a huge gross sales figure, but if they can't turn a profit (net sales) then they go bankrupt.

Look at some of the incentives GM has had to give out, and the high amount of advertising. All that cuts into profit.

Did the incentives extend to these foreign markets? Which Chevy vehicles were sold (high profit Monte Carlo, Impala, Blazer? or teeny, tiny economy cars with low profit margin?)

Where were the vehicles manufactured which were sold in foreign countries? Did those governments give incentives to GM to give a market edge if the vehicles were manufactured in that foreign land?

The whole public relations campaign of GM CEO Wagoner suggests a variation on the old lawyer joke:
"How can you tell when Wagoner is lying? When his lips are moving!"

The 10K and 10Q reports filed by GM with the SEC are models of obfuscation. Nothing short of a complete forensic accounting could really determine whether expenses from some of these foreign operations are being packed on to the back of US-based GM (how much of Wagoner's compensation is charged against the foreign operations which he ALSO heads? should more be charged if they are bigger money makers?)