This article is keeping track of General Motors (NYSE:GM) quarterly vehicle deliveries and sales. The data in the following charts are obtained from GM’s financial statements under the “Vehicle Sales” section. The following snapshot shows an example of the vehicle delivery data disclosed in the company’s financial statement.
Take note that GM presented two types of vehicle deliveries data in its financial statements: (1)wholesale vehicle sales and (2)total vehicle sales.
The major difference between the two is that the wholesale vehicle sales data correlates with GM’s revenue recognized from the sales of vehicles whereas the total vehicles sales data does not correlate with the company’s revenue presented in the income statements.
The following paragraph shows the explanation extracted from the 4Q 2019 quarterly filing that differentiates between wholesale and total vehicle sales data.
Wholesale Vehicle Sales
“We present both wholesale and total vehicle sales data to assist in the analysis of our revenue and our market share. Wholesale vehicle sales data consists of sales to GM’s dealers and distributors as well as sales to the U.S. Government, and excludes vehicles sold by our joint ventures. Wholesale vehicle sales data correlates to our revenue recognized from the sale of vehicles, which is the largest component of Automotive net sales and revenue.”
Total Vehicle Sales
“While total vehicle sales data does not correlate directly to the revenue we recognize during a particular period, we believe it is indicative of the underlying demand for our vehicles. Total vehicle sales data represents management’s good faith estimate based on sales reported by GM’s dealers, distributors, and joint ventures, commercially available data sources such as registration and insurance data, and internal estimates and forecasts when other data is not available.”
GM presented the total vehicle sales data in most of the company earnings release reports. For example, the quarterly earnings release and earning deck is one of those earnings release reports that contain the total vehicle sales data. As such, what you see in most of these reports are total vehicle sales data that do not correlate with revenue recognized in the income statements.
Nevertheless, the vehicle delivery or sales numbers presented here, in subsequent charts below, are the “wholesale vehicle sales” data that correlate closely with total revenues disclosed in GM’s income statements.
Chart of GM’s Wholesale Vehicle Deliveries
The chart above shows GM’s quarterly wholesale vehicle sales for the past 6 years from 2014 to 2019.
As mentioned in prior paragraphs, the vehicle delivery data in the current chart correlates with GM’s revenue in the income statements.
As seen from the chart, GM’s wholesale vehicle deliveries have been trending downward over the past 6 years and the downtrend has accelerated in recent years, hitting record low at only 952,000 vehicles in Q4 2019.
The plunge in vehicle sales in 4Q 2019 represents a decline of -21.5% year-over-year or -8% sequentially. In this regard, GM posted the worst vehicle sales number in 4Q 2019 among all financial periods shown in the chart.
GM’s vehicle sales have already started to decline when it first sold off its European subsidiary back in 2017. In the same year, vehicle sales plunged nearly 300,000 units in 3Q 2017 from the prior quarter. Since then, the weak demand for GM’s automotive products has continued all the way to 2019.
Moreover, GM saw the steepest decline in wholesale vehicle sales in 2019, with both 3Q and 4Q recording the worst figures consecutively, illustrating that poor vehicle sales was not a one-time event but has actually persisted over multiple quarters since 2019.
Judging from the trend of the chart, the outlook for GM’s vehicle deliveries in 2020 looks grim and sales will probably further decline especially during the production shutdown period caused by the corona virus outbreak.
Chart of GM’s Vehicle Deliveries by Segment and Region
The chart above shows GM’s vehicle deliveries breakdown into several business segments or regions such as GM North America (GMNA), GM International (GMI) and GM Europe (GME).
According to the chart, GMNA is the largest vehicle sales contributor, delivering more than 70% of vehicle sales to the company in 4Q 2019 while GMI and GME contributes the remaining 30% of vehicle deliveries to GM.
Take note that GM has sold off its GME subsidiary in 2017 and therefore, the vehicle sales data from the European region has ceased to exist by the end of 2017.
Although GMNA has been the largest automobile market for GM, the respective wholesale vehicles sales has dropped to its lowest level at roughly 684,000 units in 4Q 2019, representing a year-over-year decline of -24%.
Similarly, GMI also experienced the same downtrend in 4Q 2019 with vehicle deliveries at about 268,000 units, a figure which was -15% lower compared to the same quarter a year ago.
In short, GM has been having weak vehicle delivery not only in the North America market but also in global markets such as China and South America, with GM North America seeing the worst drop in vehicle sales in 2019.
Chart of GM’s Vehicle Deliveries and Automotive Revenue
The chart above shows GM’s vehicle deliveries and the respective automotive revenue presented in the income statements.
The automotive revenue is the revenue recognized from the sales of vehicle and thus should correlates closely with GM’s vehicle deliveries. For this reason, I have put together the vehicle delivery numbers and the respective revenue into the same chart to illustrate the effect of vehicle delivery on automotive revenue.
As seen from the chart, GM’s automotive revenue correlates closely with the vehicle delivery figures, not only in the trend of the plot but also in the magnitude of the slope. For instance, when vehicle deliveries declined to its lowest level in 4Q 2019, so did automotive revenue which was seen dropping to its lowest level at roughly $27 billion.
Similarly, when GM’s vehicle sales rises, automotive revenue follows suit.
When such a close correlation occurs, GM’s wholesale vehicle deliveries will directly affect the sales of the company and possibly its quarterly dividends which have been paid out continuously since 2014.
Furthermore, GM’s automotive revenue has contributed close to 90% of sales to total revenue in most quarters as seen in this article: GM revenue streams. If GM’s wholesale vehicle sales continued to plunge in the coming quarters in 2020, the company’s total revenue will certainly be affected and this may lead to the suspension of the dividends payout.
Chart of GM Worldwide Vehicle Deliveries Sequential Growth Rate
The chart above shows GM’s quarterly growth rate of wholesale vehicle sales for the last 5 years from 2015 to 2019.
The chart illustrates that GM’s wholesale vehicle deliveries have taken a serious hit in both 3Q and 4Q 2019, plunging by as much as -8.5% and -7.8% respectively.
Other than these quarters, 3Q 2017 was also one of the worst hit period in terms vehicle sales over the last 5 years when the respective quarterly sales severely dropped -22.6%. As mentioned, the vehicle deliveries plunged more than 300,000 units in this quarter alone.
Part of the reason for the huge decline was probably related to the sales of GM European subsidiary to PSA group in 2017.
The average quarterly growth rate for vehicle sales for the last 5 years has only been -1.5%, indicating that GM’s sequential vehicle deliveries has actually declined throughout the shown period.
Chart of GM Worldwide Vehicle Deliveries Year Over Year Growth Rate
The chart above shows the year over year growth rate of GM’s wholesale vehicle sales for the past 5 years.
As the chart shows, year over year growth was the worst affected during 2017 when GM Europe subsidiary was sold off in the same year. Moreover, throughout the period from 2017 to 2019, all quarters were seen having negative yoy growth rate and a number of them were even in the negative double-digits region.
In 4Q 2019, wholesale vehicle sales plunged severely again by -21.5% year-over-year after several quarters of single-digit declines, illustrating that GM’s vehicle sales has been getting hit the hardest and the poor sales will likely continue all the way to 2020.
In average, year over year growth rate for vehicle sales the past 5 years has been -6% which is mostly due to the negative growth rates seen in recent years.
GM’s vehicle deliveries data is comprised of two types: (1) Wholesale vehicle sales and (2) Total vehicle sales. The difference between them is that the wholesale vehicle sales correlates to revenue while the latter does not.
The vehicle deliveries data shown in this article are those from wholesale vehicle sales which correlates to revenue recognized in the income statements.
Over the past 5 years, GM’s vehicle deliveries have trended down significantly with the highest figure recorded in 4Q16 at 1,653,000 vehicles and the lowest figures at 952,000 vehicles in 4Q19.
The 4Q19 vehicle sales data was the worst among all the financial periods as wholesale vehicle deliveries dropped to record low at only 952,000 vehicles, representing a year over year drop of -21.5% or -8% sequentially.
GM North America was the worst hit in 2019 with only 684,000 units of vehicle delivered in 4Q 2019 while GM International recorded 268,000 units of vehicle delivered in the same quarter.
The declining wholesale vehicle deliveries has directly impacted GM’s automotive revenue and may soon lead to the quarterly dividends being suspended if things keep getting worst in the coming quarters in 2020.
References and Credits
1. Financial figures in all charts were obtained from General Motors Investor Relation.
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