GM Announces Slight Q1 Global Sales Decline; Toyota Takes Early Lead

General Motors (GM) has posted its first-quarter sales for 2008, citing a global decrease of less than 1.0% compared to the same period in 2007 as it sold 2.25 million vehicles worldwide. It was a record quarter for GM outside the United States, as the company posted record gains in three out of four global markets and sold a record 64% of its volume outside the United States. As was the story with most of 2007, continued decreases in North American sales kept GM from posting an overall increase, despite an 8% gain in markets outside NAFTA.

GM blamed the 10.2% drop in North American volume on the current softness in the U.S. market, calling rising fuel prices, housing concerns, and credit availability all factors holding back new car sales. The company's newest products, however, including the popular crossover-utility vehicles (CUVs), new mid-size sedans, and a new Cadillac CTS luxury car all helped various brands and segments to post individual gains. But the company's overall 21% market share has not improved from the first quarter of 2007, according to a company statement.

Europe did better, with GM posting record sales for the Chevrolet brand of 131,000 units for the quarter. Russian sales saw a 78% gain over the same period of 2007, and overall Europe sales were up 3.3%. But not all the brands fared so well, with GM's traditional European brands Opel/Vauxhall down 2.3%, and Saab shrinking 11.7% in the European market. The Latin America, Africa, Middle East region posted significant gains thanks in large part to a 36% spike in sales for the Brazilian markets. The company also reports record first quarter sales for Chile, Ecuador, Venezuela, and Israel.

Finally, GM's Asia-Pacific region also posted a 5.8% stronger sales volume for the first quarter. GM remained the top-selling global automaker in China, with that market posting a 7% improvement, including the company's Wuling brand, which sold 6% more vehicles in the first quarter of 2008 than the year-ago period. India also provided a source of sales strength, up 58% for the quarter to 18,000 vehicles.

Outlook and Implications

Good as the numbers were globally, they were insufficient to best Toyota. In total, GM sold 2.25 million units for the first quarter of the year, but Toyota came in at 2.41 million vehicles according to several sources. Toyota has not yet released global sales numbers. "We obviously want to win," said Mike DiGiovanni, GM's executive director of global markets and industry analysis, according to a report by the Detroit News. "We'd like to be No. 1 in sales at the end of the year and were going to compete hard for every sale to do that." In reality, just like at the end of 2007 when debate raged over who actually had the sales crown, the results simply do not matter. The first place title has no impact any more on product plans, incentive races, acquisitions, or market share, for the simple reason that the vast majority of the consumer public simply does not care.

In previous days, nationalistic pride in the United States would have had American consumers up in arms over GM losing the top spot to Toyota. But the truth of the matter today is that Toyota is just as much a part of the American landscape as GM is, outselling the U.S. automaker in several regions throughout the country, and gaining ground annually for the last 20 years. American consumers have largely abandoned nationalist pride as a purchase motivator, and over the past two decades have decided to go for the better product. That has allowed scores of foreign brand automakers to gain sizeable portions of the market, with foreign nameplates now accounting for over half of all U.S. sales. As a result, the news that Toyota outsold GM is not news to anyone living outside the American Midwest.

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