GM Reports 3.0% Global Sales Growth; Barely Edges Toyota Figures

General Motors (GM) announced its global sales numbers yesterday, putting it just a few thousand units ahead of the preliminary sales numbers announced by Toyota earlier in the month. GM stated that it sold 9,369,524 vehicles worldwide throughout all regions in 2007; Toyota's initial presentation on 10 January stated that it had sold 9.370 million units, which would put the numbers in a statistical tie. But Reuters news service has confirmed that the actual Toyota number is 9.366 million units, bringing the gap to 4,000 or so units with GM, worldwide. "We set a record in China with more than a million vehicles sold. We nearly doubled our sales in Russia to an all-time record of more than 258,000 vehicles delivered. And we set a record in Brazil with nearly a half-million vehicles sold," John Middlebrook, GM vice president of global sales, service and marketing, said in a prepared statement today. "This is the kind of emerging market growth that fuels our global performance. Customers are responding to our fuel-efficient and dynamically-designed product lineup around the world."

GM's quarterly numbers were also up, with total growth globally of 4.8% for the fourth quarter 2007. Again, the problem area for GM remains North America, which posted a 5.0% reduction in volume versus the same period 2006. Growth in other regions was far better, with Europe up 11.4% y/y, Latin America, Africa, Middle East up 17.8%, and Asia-Pacific region up 16.7% in total. For the full year 2007, GM posted gains in every other sector of the world except North America, and as the automaker predicted, total sales outside the United States accounted for nearly 60% of GM's total sales volume.

On an annual basis, the European region grew 8.9% to 2.182 million units, a record level of sales for the second year in a row. Strong performance by the new Corsa, Astra, Meriva and Zafira from Opel/Vauxhall helped the brand grow 4.4%, while Chevrolet achieved record total 2007 sales of 458,000 vehicles, up nearly 33.5% for the region. GM's Latin America, Africa, and Middle East region saw total sales increase 19% YTD to 1.23 million units, exceeding one million for only the second time in the company's history. The Brazilian region set an all-time sales record with 499,000 units sold. Finally, the Asia Pacific region continues to be the largest outside North America, with sales topping one million for the third consecutive year. GM became the first automaker to sell one million vehicles in China ever, experiencing a 15.1% increase in sales for the entire region.

Outlook and Implications

Did GM Really Win?

The importance of being biggest in the market is getting more media airtime than either Toyota or GM would likely consider useful. Neither company has made an issue of being the largest auto company in the world by sales, but the story persists among the media as one of some importance. The issue is more of one of a legacy change, in which the domination of GM on the global market scene can now truly and effectively be called over. Toyota has proven beyond a shadow of a doubt that the world now must accept that two companies will be at the top of the lists; for all intents and purposes, the global sales race for 2007 has ended in a statistical tie. As to whether or not GM actually won, some pundits have argued that Toyota was actually the victor due to GM's inclusion of the Wuling JV products in the final tally. SAIC-GM-Wuling JV is a cooperative that involves Shanghai Auto Industry Corporation; GM's share of the venture comes to roughly 34%, below the 51% that most of the industry considers the level of ownership to be included. But the venture is putting cash into GM's pockets in the region, and given the involvement seems to be more than simply a paper arrangement, most outlets are including the Wuling van numbers in GM's total global sales tally.

GM's reduction has come from almost exclusively from a poor performance in North America. Excluding the North American volumes, GM experienced a 13.2% increase in sales for 2007 for all other regions globally. According to Automotive News, GM continues to outsell Toyota in 13 of 15 of the markets in which the two automakers compete. But the situation GM finds itself dealing with in North America is partly its own doing. The company deliberately reduced sales to daily rental fleets by 100,000 units according to the company, and while that does not account for the full 290,000 unit drop that GM saw in North America, it does account for a significant percentage. Much of the remainder can be attributed to declines in big trucks, which continued to see difficult numbers for 2007. GM's full-size trucks lost 4.9% of their volume from 2006 to 2007, roughly 119,000 units, despite an increase of 136,000 units from last year of large CUV sales. Full-size trucks and SUVs saw sales drop for the segments, affecting GM's home-market sales.

Does it Matter?

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