General Motors Company (GM) plans to redesign and sell its Chevrolet Colorado mid-size pick-up truck in the U.S. The company would also start selling the latest version of the pick-up truck in Thailand, the world's largest market for mid-size trucks.
Currently, GM builds Colorado in its Shreveport, Louisiana plant. The plant will manufacture Colorado until mid-2012 and will close afterwards.
As of now, it is unclear where the new Colorado will be built and how much it would cost. However, GM’s new 4-year contract with United Auto Workers (UAW) union indicates that the company will build a mid-size pick-up at a plant in Wentzville, Missouri, near St. Louis.
The new Colorado is based on a frame developed in Brazil. However, GM’s engineers will tailor the truck to fulfill the requirements of other markets.
The U.S. market has been experiencing sluggish sales of small/mid-size pickups as consumers prefer the full size pick-ups. Sales of compact pick-ups accounted for a meager 4% of U.S. auto sales in September compared with 26% for full-size pick-ups.
Sales of pick-ups went up 10.1% to 1.31 million units in the first nine months of 2011. Meanwhile, sales of GM light trucks rose 13.1% to 1.14 million units in the same period.
At the end of August, GM decided to trim production for pick-up trucks until October in order to make up for the slack demand of the same on the back of continued weakness in the housing and construction sectors.
GM aims to have a 90-day supply of trucks at the end of 2011 and healthy supply in 2012, when it plans to transform several truck plants for production of new products.
GM, a Zacks #3 Rank (Hold) stock, posted a profit of $2.54 billion or $1.54 per share in the second quarter of the year, which almost doubled from $1.33 billion or 85 cents per share in the same quarter of 2010. With this, the automaker has beaten the Zacks Consensus Estimate by 33 cents per share.
Revenue in the quarter appreciated 19% to $39.37 billion (including $330 million from GM Financial) on worldwide sales of 2.32 million units versus 2.16 million a year ago, thereby capturing a market share of 12.2%. It also exceeded the Zacks Consensus Estimate of $36.61 billion.
The company fared well compared with its hometown rival, Ford Motor Co. (F) during the quarter under study. Ford posted a profit of $2.64 billion or 65 cents per share in the second quarter, a $67 million or 2.5% decline from $2.70 billion or 68 cents per share in the corresponding quarter of 2010. However, the company’s profits were higher than the Zacks Consensus Estimate of 60 cents per share.
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