GM Reports Profit Boost As Sales, Market Share Shrinks

Steph Willems
by Steph Willems
gm reports profit boost as sales market share shrinks

General Motors’ first-quarter earnings report revealed turmoil in international markets and a shrinking presence in North America, but net income rose to $2.1 billion, up from $1.1 billion a year ago, and adjusted earnings per share ($1.41) beat out estimates of $1.11. Still, that wasn’t enough to stop its stock from sliding in pre-market trading, as revenue of $34.9 billion undercut analyst estimates of $35.28 billion. Pre-tax earnings fell 11 percent.

In its report, GM wanted to talk about trucks. You know the ones — the revamped 2019 Silverado and Sierra 1500 crew cabs, now featured in half of the pop-up ads on your author’s computer and phone, advertising 0% financing.

Trucks are key to the company’s health, given how much it relies on its home market. The automaker reports average transaction prices $5,800 higher than the crew cabs the new models replaced. Production of regular cab and extended cab pickups began in March, GM said, with revamped heavy duty models arriving later this year.

GM Chief Financial Officer Dhivya Suryadevara claimed the company’s ongoing restructuring efforts saved the automaker $400 million in Q1 2019, though a sales slump in China and pressures elsewhere conspired to sink revenue at home and abroad. In China, a key growth market for GM, income fell 37 percent to $376 million, with sales falling 18 percent from the same period in 2018.

North American revenue dropped 1.4 percent compared to Q1 2018, with margins falling from 8 percent to 6.9 percent. Income fell $300 million to $1.9 billion. In the U.S., sales fell 7 percent in the first quarter while global sales declined by 10 percent.

Market share? That dropped, too, from 17 percent to 16.1 percent in the United States. Globally, GM’s share fell from 11.4 percent to 10.6 percent. This year has already seen GM kill off the Chevrolet Cruze, Volt, and Buick LaCrosse, with the Cadillac XTS and perhaps the Chevrolet Sonic to follow. Interestingly, U.S. pickup market share fell from 31.9 percent to 28 percent between the first quarter of 2018 to 2019. We’ve already told you how Ram kicked the Silverado to third place in the U.S. sales standings.

Amid healthy competition from revamped rivals, GM hopes to reclaim more of the market with a full line of half-ton pickups and its looming next-gen HDs. Still, many feel the new trucks should be performing better. GM truck sales fell in the first quarter as inventory rose.

Here’s a 12-month moving average of U.S. Silverado and Sierra sales combined. There’s one line missing from that chart which is my wholesale estimates for clients.

I’d love to hear GM talk themselves out of that decline despite newly redesigned trucks. pic.twitter.com/0EMY52v00p

— Daniel Ruiz (@DRuizG80) April 30, 2019

Other data shows fleet sales rising from 23 percent of total U.S. sales in Q1 2018 to 25 percent in the most recent quarter. Average incentive spend per vehicle fell $236 to $4,589.

[Images: General Motors]

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  • Jeff S Jeff S on Apr 30, 2019

    I am with Vulpine let's see a true compact pickup especially one that you don't have to get on a ladder to reach in the bed. Maybe Hyundai or Mitsubishi. Wouldn't mind having another Mighty Max especially if it were priced lower, rubber floors, 6 speed manual, and crank windows.

  • DenverMike DenverMike on Apr 30, 2019

    There's no real improvement with every generation of GM pickups and the cost cutting, cheapness and Chinese content shows. Just compare them to the others. In fact the past three "generations" may be the same old trucks, just a complete re-skin and renaming the platform. Their low hanging (diesel) "DEF tanks" give it way. They were an afterthought when emissions required them, and that's fine, but that was 10+ years ago, and they still haven't incorporated them into the truck. I can't feel sorry for GM. Fullsize pickups (and fullsize SUVs) should be their main priority, goes without saying.

    • Gtem Gtem on May 01, 2019

      "There’s no real improvement with every generation of GM pickups and the cost cutting, cheapness and Chinese content shows" Sums it up nicely. And this is from a guy that absolutely adores GMT400 Chevies.

  • Arthur Dailey "Check out the used car market." Late model, low mileage vehicles are in many instance selling for more than you would pay if you put a deposit on a new vehicle. The reason? Supply and demand. You can take the used vehicle home now. Whereas you might have to wait up to 24 months for your new vehicle.
  • VoGhost Matt, you say 'overpriced', but don't you mean 'underpriced'? It's when a manufacturer underprices, that dealers add their markup. If they were overpriced, the dealers would discount.
  • Bobbysirhan I'm surprised by the particular Porsches to make the list, and also by the Cadillac. Most of all, I'm shocked that the 2-door Mini Cooper is on here. I didn't even know they still made them, let alone that anyone was still buying them.
  • Ajla I assume the CT5 is on the list due to the Blackwing variant.It would be interesting to take the incentives that existed in October 2019 and include that in an analysis like this as well. The thing about the used market is that while you'll pay less in total dollars, in some cases the percentage increase from 2019 is even worse than with new cars. Buying a Saturn Relay for $6k isn't exactly a winning move.
  • VoGhost Reminder: dealers exist to line the pockets of millionaires who contribute to local politicians.
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