Per Bloomberg, people familiar with the matter informed that General Motors Company’s GM sales declined by around 13% in August. In fact, this automaker’s strategy to pullback on sales incentives, particularly for full-size pickups, led to this decline. Notably, this Detroit, MI-based auto giant no longer reports vehicle sales figures on a monthly basis. Instead, the company is disclosing sales figures on a quarterly basis.
Since the retail demand for vehicles is showing a declining trend, any pullback of discounts is likely to adversely hurt the overall sales figure.
Per the news, people familiar with the matter revealed that General Motors faced a lot of hardships in selling passengers cars in August and deliveries declined for various models. According to the data provided by J.D. Power, General Motors’ incentive spending declined in August 2018 by over $800 a vehicle on an average compared with August 2017. Its discounts also declined by more than $200 from July to $4,146 a vehicle.
Over the past three months, shares of General Motors have underperformed the industry it belongs to. Over this time frame, shares of the company have decreased 19%, whereas the industry declined by 11.1%. Further, the Zacks Consensus Estimate for both the current quarter and current year earnings has decreased over the past month.
Zacks Rank & Key Picks
General Motors currently carries a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF, AB Volvo VLVLY and Honda Motor Co., Ltd. HMC. While Fox Factory and Volvo sport a Zacks Rank #1 (Strong Buy), Honda carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 16.8%. Over a year, shares of the company have gained 69.8%.
AB Volvo has an expected long-term growth rate of 15%. Over the past two years, shares of the company have grown 52%.
Honda has an expected long-term growth rate of 3%. Shares of the company have risen 3.2% in the past year.
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