Will the North American market for cars go up 45 percent in the next four years? I’m not convinced. Certainly the momentum hasn’t shown up yet. But this slide is from GM’s “Global Business Conference” which the company is holding in Michigan this week to drum up support for its forthcoming IPO. So… a little over-optimism is hardly surprising. But we’re not the only ones skeptical of GM’s ability to take flight as a public company. Automotive News [sub] reports that
Mirko Mikelic, a fixed income portfolio manager at Fifth Third Bank in Grand Rapids, Michigan, said he expected GM to face grilling about the risks of a return to recession in the United States.
“There’s concern about a double dip out there. That’s probably the biggest thing that’s weighing over GM coming to the market because that’s going to keep (auto sales) down for another year or two,” he said.
Check out the complete presentation in PDF format here, and decide for yourself if The General is worth an investment. The slides after the jump are certainly more convincing…
Luckily GM doesn’t have to rely completely on the US market… and it’s definitely the best-placed US automaker in key growth markets. No wonder its IPO fundraising is taking such an international tack.
They might be right about the emerging markets but I don’t see the US Market going to 17 million anytime soon. Maybe by 2020 but seriously if GM expects that the market is going there, then they will fail again.
educatordan,
2020? I’m glad that somebody here is an optimist!
Actually, it wouldn’t be doubling sales to increase by 45%; doubling sales would be a 100% increase. If they sell a million cars per year now (I know the real # is higher), a 45% increase would be 1.45 million.
This is very true, and the post has been amended. 17m is still a very big number.
45% in 4 years means an increase of 9.7% per year.
Is it me, or are they over confident?
GM never seems to ask itself the question: “How do we make money in a shrunken market?” They always seem to just confidently proclaim: “We’ll make money by selling ___ million more cars next year! Ignore the fact that our marketshare has been shirinking even in good times!”
The total U.S. market growth is more likely to be fits and starts with last year’s numbers to be about the mid-point. Also likely is General Motor’s continued market share erosion.
They had better be able to show they can consistently show a profit at 75% of last year’s numbers or they are just burning through the government’s money with another nasty surprise when it’s gone.
Seeing their top cars at 12 of 15 and 19 of 20 in the August 2010 Consumer Reports list of family sedans doesn’t cut it.