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5 Years Analysis of GM Vehicle Sales and Market Share

General Motors is one of the leading automakers not only in the US but also globally. As a result, the company vehicle sales and market share are some of the most discussed topics and that pose great interest to investors. From the data, investors not only can track the demand of GM product but also directly the growth of the company.

GM Market Share in the US, China and South America

This article mainly focuses on General Motors vehicle sales and market share in its major markets. For example, the following series of charts are displaying vehicle sales and market share data in the United States, China and South America.

The reason that US, China and South America were chosen for discussion is that these regions contribute the biggest chunk of revenue to GM. In addition, all three regions represent GM biggest markets in the world.

Vehicles sales from these 3 regions alone contributes to more than 80% of GM total vehicle sales in the latest quarter of 2Q 2019.

Here is a snapshot of the data of total vehicles sales from the 2Q19 quarterly filing:

GM Total Vehicle Sales from 2Q19 Quarterly Filing

GM Total Vehicle Sales from 2Q19 Quarterly Filing

Total Vehicle Sales and Revenue Recognition

Before going further, I would like to stress that the vehicle sales data presented in the following series of charts do not correlate with the revenue recognized in the company income statement. The vehicle sales data represent GM management’s good faith estimation of its market share in the respective regions.

Here is a quote from the company financial statements regarding total vehicle sales data.

“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.”

For investors who are interested in vehicle sales data that correlates with revenue recognized in the income statements, you can read about the article here: General Motors Wholesale Vehicle Sales.

GM Europe vehicle sales and market share

In addition, you may notice that GM Europe vehicle sales and market share data is not presented in this post. The reason is that GM has sold the GM Europe subsidiary in 2017. As a result, the vehicle sales and market share data has ceased to exist starting 2017.

GM Total Vehicle Sales and Market Share in the United States

GM vehicle sales and market share in the US

GM vehicle sales and market share in the US

The plots above represent the quarterly total vehicle sales and quarterly market share in the US for the past 5 years from 2014 to 2019.

Total vehicle sales in the US had been mostly flat throughout the shown period in the chart. For example, vehicle sales has been quite consistent in 2018 and 2019, with the figures staying flat in most of the quarters. The numbers has fluctuated tightly between the 600k and 800k range. During the same period, there has been no sign of vehicle sales trending higher.

In terms of market share in the US, the trend of the plot may be heading for a decline. For example, GM market share in the United States in 2014 and 2015 had been quite consistent in most of the quarters, averaging around 17%.

But the market share data began swinging drastically starting 2016, going from the lowest number of 16% to the highest of 18%. The market share data has been hitting lower low since 2016, with the lowest figure occurring in 3Q18 at 15.8%. This trend has continued all the way to 2Q19.

Take note that vehicle sales data did not show this dramatic pattern in the same period.

GM YoY Total Vehicle Sales Growth Rate in the US

GM YoY Total Vehicle Sales Growth Rate in the US

GM YoY Total Vehicle Sales Growth Rate in the US

I plotted the year over year vehicle sales growth rate in the chart above to show how the growth rates in the US have changed over the 5 year period.

Based on the data in the chart, I calculated the average year over year (yoy) growth rate from 2015 to the latest quarter. From the calculation, the average yoy growth rate for vehicle sales has been 0% from 2015 to the latest quarter. In other words, there has been no growth in vehicle sales in the US market since 2015.

The plot above also tells us that the yoy growth rate has got worst in 2018 and 2019. Most figures during these years were in the negative territory. The worst drop occurred in 3Q18 when the growth rate dropped more than 10% compared to the quarter a year ago.

GM Total Vehicle Sales and Market Share in China

GM vehicle sales and market share in China

GM vehicle sales and market share in China

China is the second most important markets for GM but the company can only gain access to the Chinese market through joint ventures with a local Chinese automaker.

Nevertheless, I have presented a chart above to show the quarterly total vehicle sales and market share data in China for the past 5 years from 2014 to 2019.

Again, the vehicle sales data above do not translate to any revenue recognized in the income statement as GM does not own more than 50% of these subsidiaries in China.

Here is a quote from GM financial statement regarding vehicle sales in China:

“The vehicle sales of our Automotive China JVs are not recorded in Total net sales and revenue. The results of our joint ventures are recorded in Equity income, which is included in EBIT-adjusted above.”

Coming back to the chart, vehicle sales in China may be heading for a decline. If you have noticed, a very unique pattern exists in the chart. For example, vehicle sales surged to new high in Q4 in 2015, 2016 and 2017. These surges in sales can be attributed to the Chinese New Year festival which usually falls on Q1. As a result, the Chinese would usually purchase new cars in drove before the festival and this purchase is usually done in Q4. So that explains the high sales figures during Q4.

However, vehicle sales data in 4Q 2018 did not display the normal exceptional result and were unusually low in that quarter compare to the quarter a year ago. The vehicle sales in 4Q18 dropped more than 20% year over year. My best guess for the poor performance could be the on-going trade wars that had caused the slow down in the Chinese economy.

In terms of market share, GM vehicle sales in China had been consistently stable at around 15% in 2014 and 2015. But the figures had been trending lower in recent years especially in 2018 and 2019. As seen from the chart, GM market share in China had hit the lowest figure at only 12% in 2Q19 which was a new low for the company since 2014.

In addition, the market share data had also shown poor performance in 2018 and early 2019. During these quarters, GM could only command a 13% market share in China which was considerably low compared to prior years. Again, this decline may be due to the on-going trade war which had significantly slowed the economy.

GM YoY Total Vehicle Sales Growth Rate in China

GM YoY Total Vehicle Sales Growth Rate in China

GM YoY Total Vehicle Sales Growth Rate in China

Similar to the growth rate in the United States, the average year over year growth rate for the past 5 years in China has also been 0%. In other words, vehicle sales has not grown a bit in China in the shown period above.

Also, you may notice that yoy sales in China had dropped significantly in 2018 and 2019, with all quarters showing negative growth rates in those years.

This is a worrying trend if the pattern above persists for the rest of 2019. The decline in both the vehicle sales and market share shows that GM is losing out to competitors in China.

GM Total Vehicle Sales and Market Share in South America

GM vehicle sales and market share in South America

GM vehicle sales and market share in South America

South America represents GM third largest market after US and China. Brazil contributes the most sales in the South America market, at over 90% of total sales in the region.

From the plots above, both vehicle sales and market share in South America are definitely heading for a slump. Best sales were recorded in 2014 at more than 200k vehicles sold in each quarter. Since then vehicle sales had dropped significantly and was only slightly more than 160k vehicles in 2Q 2019.

Even though vehicle sales in 2018 and 2019 had been a lot lower compared to the sales in 2014, GM was still able to maintain almost the same market share in both years. This may indicate that the whole automotive market in South America had contracted since 2014.

GM YoY Total Vehicle Sales Growth Rate in South America

GM YoY Total Vehicle Sales Growth Rate in South America

GM YoY Total Vehicle Sales Growth Rate in South America

The chart above shows GM South America yoy vehicle sales growth rate for the past 5 years from 2015 to 2019.

From a spreadsheet calculation, the average year over year growth rate for the South America market has been -4%, which is far worst than the US and China market.

As seen from the chart, 2015 marked the worst drop in yoy vehicle sales in South America, averaging around -20% in each quarter.

Total vehicle sales started to recover in 2016, as seen from the positive yoy growth rate by the end of 2016 and the sales figure surged to more than 10% in 2017. Since then, vehicle sales in South America has remained flat throughout 2018 and 2019, hovering at close to 0% in those years.

Conclusion

Overall, two of the largest markets (US and China) for GM had been flat in terms of vehicles sales and market share. China vehicle sales and market share has got worse in recent years with year over year growth rate in the red, indicating that the trade war has taken a toll on the automotive market.

In addition, South America vehicle sales has been declining but the market share is still holding up. This may indicate a shrinkage of the overall automotive segment in the South America market.

References:

1. Financial figures in all charts and images were obtained from GM Sec Filings.

2. Featured image was obtained from GM Europe.

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