Shocker: GM More Conservative on US Sales Than Ford

GM’s executives are well-known for their optimism, a tradition that has been maintained throughout nearly 40 years of sales and market share decline. But in an interview with Reuters, GM CEO Fritz Henderson curbed his enthusiasm, predicting US sales in 2010 will be “between 10m and 10.5m units” this year, and reaching 13m to 13.5m units in 2011. That prediction is considerably less than Ford CEO Alan Mulally’s recent assessment that 2009 sales will hit 11m, and climb to 14.5m by 2011. Henderson blames a weak projection for September sales for his seasonally adjusted annual sales rate (SAAR) realism, telling Reuters the September SAAR would not top 9m units. But GM’s relative pessimism doesn’t mean GM couldn’t be in for a nasty surprise once annual financial information is tabulated.

Break even … would be a 10 million-unit market and an 18 percent market share. We’re going to achieve that goal. We don’t need the market to be 14 million or 15 million (units) to make money

Henderson repeats his opinion that new GM has slimmed down enough to make money at even the low end of industry sales predictions. However Henderson’s assumption requires GM to maintain its market share in the US, a goal that The General will be hard-pressed to achieve. GM’s deep dealer cuts may have helped slim the firm down, but they also present a real challenge to GM’s efforts to hold onto market share.

If GM is able to get 15 to 20 percent of the U.S. market, it will be nothing short of a miracle performed by the remaining dealers… It would be better to calculate what would be a reasonable share of the market for the new GM and then set sales targets. That would make it easier to forecast sales and measure results.

That’s the verdict from the usually Detroit-boosting Keith Crain over at Automotive News [sub]. And if Crain can’t get excited about GM’s future, good luck finding someone who can. Meanwhile, time isn’t exactly on GM’s side. Recent testimony before the Senate Banking Committee [via MarketWatch] reveals that GM’s IPO is still planned for next summer, meaning GM has less than a year to impress investors with its financial results. And believe me when I say GM’s stock offering will not be a simple referendum on US sales rates. If GM hasn’t proven that it can hang on to its market share and make money by the end of Q1 2010, expect its IPO to be delayed at best.