Shocker: GM More Conservative on US Sales Than Ford

Edward Niedermeyer
by Edward Niedermeyer

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.

Edward Niedermeyer
Edward Niedermeyer

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  • Anonymous Anonymous on Sep 28, 2009

    Big Al is a moron....there is no way that 2009 sales will be 11 million. Sept-Dec will be terrible for automakers and the dealers will be ghost towns.

  • Porschespeed Porschespeed on Sep 28, 2009

    As P71 noted, the C4C spurt is over. Those who were able to buy new, have. Didn't we have this discussion about a year ago? (and didn't more than a few of us come up with numbers in the 8-9 MM range?)

  • Slavuta I don't know how they calc this. My newest cars are 2017 and 2019, 40 and 45K. Both needed tires at 30K+, OEM tires are now don't last too long. This is $1000 in average (may be less). Brakes DYI, filters, oil, wipers. I would say, under $1500 under 45K miles. But with the new tires that will last 60K, new brakes, this sum could be less in the next 40K miles.
  • BeauCharles I had a 2010 Sportback GTS for 10 years. Most reliable car I ever own. Never once needed to use that super long warranty - nothing ever went wrong. Regular maintenance and tires was all I did. It's styling was great too. Even after all those years it looked better than many current models. Biggest gripe I had was the interior. Cheap (but durable) materials and no sound insulation to speak of. If Mitsubishi had addressed those items I'm sure it would have sold better.
  • Marty S I learned to drive on a Crosley. Also, I had a brand new 75 Buick Riviera and the doors were huge. Bent the inside edge of the hood when opening it while the passenger door was open. Pretty poor assembly quality.
  • 3-On-The-Tree Alan, I was an Apache pilot and after my second back surgery I was medically boarded off of flying status due to vibrations, climbing on and off aircraft, so I was given the choice of getting out or re-branching so I switched to Military Intel. Yes your right if you can’t perform your out doesn’t matter if your at 17 years. Dad always said your just a number, he was a retired command master chief 25 years.
  • ToolGuy "Note that those vehicles are in direct competition with models Rivian sells"• I predict that we are about to hear why this statement may not be exactly true