General Motors Co.’s (GM) global sales in the third quarter of 2014 rose 2% year over year to 2,449,595 vehicles. This is the best third quarter sales figure best since 1980.
The improvement was driven by the company’s upbeat performance in China and the U.S., together with improved market traction of the Opel brand. General Motors also launched Chevrolet Colorado and GMC Canyon in North America, Opel/Vauxhall Corsa in Europe, and Buick Envision and Cadillac ATS-L in China. These launches are expected to benefit the company significantly.
U.S. and China are the two major markets for the company. Third-quarter sales in the U.S. improved 8% year over year while the same in China went up 14%. Meanwhile, General Motors is aggressively focusing on its Chinese operations and expects vehicles sales to surpass 3 million units in 2014. Notably, the company’s last year sales in the country totaled 3.16 million vehicles. General Motors and its joint ventures also crossed 20 million cumulative sales in China in the month of September. The improvement can be mainly attributed to strong domestic sales at Shanghai GM and SAIC-GM-Wuling.
In the third quarter, Chevrolet sales in China surged 13% to 169,830 units. Overall Chevrolet sales improved 19.3% in Sep 2014, bringing the number to 68,347 units, marking the brand’s best sales month in China. Sales of this brand benefited from the launch of a new-generation Cruze model. Year-to-date Chevrolet sales in South Korea also recorded better levels than last year.
General Motors also benefited from the increased sales of Chevrolet Silverado and GMC Sierra vehicles, which helped the company achieve a retail market share of 37.9% in the quarter.
Buick sales increased 7% globally in the third quarter to 284,540 units, driven by strong growth in the U.S. and China. Buick sales in China improved 8% to 220,578 units in the quarter. Meanwhile, the combined sales of small SUVs including the Buick Encore, Chevrolet Trax and Captiva increased 90% in the third quarter in China. In the U.S., Buick Encore gained the best-selling vehicle tag. Notably, General Motors plans to launch Chevrolet Trax in the U.S. in early 2015.
Cadillac’s global sales went up 4% in the third quarter, while China sales surged a strong 48% to 18,665 units. Meanwhile, Opel/Vauxhall gained considerable traction in 11 European markets, including Germany, in the first nine months of 2014. Prior to this, Opel/Vauxhall brand’s market share in Germany stood at 7%.
General Motors faces tough competition from German automaker Volkswagen AG (VLKAY) which occupied the second position in terms of vehicle sales garnered over the first nine months of 2014. Volkswagen’s 7.4 million vehicle sales outshined General Motors’ sales of 7.37 million vehicles. However, Toyota Motor Corp. (TM) led the race, outperforming General Motors and Volkswagen. The Japanese automaker expects annual sales of 10.1 million vehicles in 2014.
General Motors currently holds a Zacks Rank #4 (Sell). A better-ranked automobile stock worth considering is Tesla Motors, Inc. (TSLA) with a Zacks Rank #2 (Buy).
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