GM future: Will green sell?
The "new" General Motors reported its financial results for the first 83 days since emerging from bankruptcy, but the more interesting item may be examining the hottest selling models---A Silverado pickup, a full-size Impala and the Camaro muscle car.
The Cash for Clunkers program was a success, but the most popular cars---at least in GM's case---weren't exactly gas sippers. Where will the Volt---GM's electric dynamo of the future---fit into this picture?
It's a question worth asking since GM's future allegedly rides on cars like the Volt. The reality from GM's statement (GM presentation, AP report):
Contributing to GM’s sales in the U.S. was the strong retail performance of some of its newest vehicles, including the Chevrolet Camaro and GMC Terrain, as well as the Chevrolet Equinox, Buick LaCrosse and Cadillac SRX which are generating higher average transaction prices and higher residual values than previous model year vehicles.
And the top-selling cars for the period through October were the Silverado pickup and Impala.
Let's face it, we weren't out there buying the GM Aveo (below) with our incentives.
What exactly does that mean for other GM vehicles, notably the smaller ones like the Volt and Spark?
It's an open question, but one worth asking. Are consumers going to go for the green movement or the head turning you get when you're zipping down the highway in a Camaro? The engineering challenge for GM and its rivals will be to put green technologies into hot cars without anyone noticing. Hope Americans suddenly opt for smaller cars. Or pray for $20 gas prices.
Since we the people own a big chunk of GM perhaps we shouldn't care what the company sells---as long as it sells something and pays back its loans.
On that front, GM is showing some progress out of bankruptcy. The company reported "managerial net loss" of $1.2 billion from July 10 to Sept. 30. And GM said it will start repaying $6.7 billion in government loans in December.
GM's sales were boosted by the Cash for Clunkers program. GM sold more than 478,000 units, up from 451,000 and 364,000 in the second and third quarters, respectively.
You can argue whether GM is really turning a corner and talk until you're blue in the face. Meanwhile, the loss from GM isn't reported under generally accepted accounting principles. Frankly, these numbers are directional. But it could be worse.
The larger question is: What's next?
GM gave some hints for its new normal. From GM's statement:
Globally, GM expects total vehicle industry volume to moderate in the fourth quarter of 2009, with an estimated SAAR to be approximately 65.4 million units, down from 67.8 million units in the third quarter. Following the expiration of the successful ‘Cash for Clunkers’ stimulus program in the U.S. which contributed to GM’s strong sales in the third quarter, the company anticipates the U.S. industry total vehicle SAAR volume in the fourth quarter will be approximately 10.7 million units, compared to 11.7 million units in the third quarter. Looking ahead to 2010, GM anticipates modest growth, with total industry volumes estimated at 62 to 65 million units, with a modest recovery in the U.S. market where the outlook for the 2010 calendar year for total vehicles is estimated at 11-12 million units.
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This post was originally published on Smartplanet.com