GM Revenue Breakdown, Profitability And Margin By Segment

GM Sierra HD Denali. Source: GMC Webpage

General Motors’ (GM) revenue consists of 4 major segments and they are GM North America (GMNA), GM International (GMI), Cruise, and GM Financial.

According to General Motors, both GM North America and GM International are the automotive sector that design, build, and sell trucks, crossovers, cars, and automobile parts.

GM North America (GMNA) meets the demands of customers in North America while GM International (GMI) meets the demands of customers outside North America, with vehicles developed, manufactured, and/or marketed under the Buick, Cadillac, Chevrolet, and GMC brands.

In addition, GM has equity ownership stakes in entities, primarily in China, with vehicles developed, manufactured, and/or marketed under the Baojun, Buick, Cadillac, Chevrolet, and Wuling brands.

Cruise is GM’s global segment responsible for the development and commercialization of AV technology and includes related engineering and other costs.

GM Financial is the captive finance arm of the company that provides loans and credit facilities not only to retail customers but also dealers.

In this article, we will explore GM’s revenue by segment and by region.

Apart from the revenue breakdown, we also look into the profits and margins of each segment to find out which one is a profitable sector.

Let’s get started!

GM North America (GMNA)

GMNA revenue, profit and margin

Let’s first look at GM North America or GMNA revenue, profitability, and margin as shown in the chart above.

In 2022, GMNA’s revenue totaled $128 billion, up 27% from the same period in 2021, probably one of the best year-on-year growth rates ever reported.

In terms of profitability, GMNA’s EBIT-adjusted or earnings before interest and taxes adjusted came in at $13 billion in 2022, up 26% from 2021 and a record high since 2016.

For margin, GMNA’s EBIT-adjusted margins remained steady at 10% as of 2022.

For the 2023 outlook, GM expects its North American automotive operations to perform at a consistently strong level similar to that of 2022.

GM International (GMI)

GMI revenue, profit and margin

GM International is one of GM’s automotive sectors responsible for businesses outside of North America and primarily in China.

As seen in the chart above, GM International, or GMI is far smaller than its North American sector and makes only about one-tenth of the revenue of GMNA.

For example, in 2022, GMI’s revenue came in at only $15 billion USD, which was significantly less than GMNA’s $128 billion reported in the same fiscal year.

Similar to GMNA, GMI’s revenue trend also has been on a decline since 2016 and was down to only $12 billion as of 2021, a drop of a massive 42% from 2016 or roughly 8% on average over the last 6 years.

GMI’s 2022 revenue topped $15 billion, a rise of 25% over 2021.

In terms of profitability, GMI was nowhere near its North American segment.

For example, GMI made only $1.1 billion in adjusted EBIT in 2022 out of $15 billion in sales revenue.

This translates to roughly an adjusted EBIT margin of just 7%, a significantly smaller margin compared to that of GMNA reported in the same year.

Not only that, GMI reported an EBIT-adjusted loss of $202 million and $528 million in 2019 and 2020, respectively, while GMNA has never had such a loss since 2016.

Nevertheless, GMI’s profits and margins have been on a rise since 2020 after reaching a record bottom in the same year.

Moving forward, GMI is expected to generate record profit and margin in fiscal 2023 similar to that of its North American segment.

In short, GMI is on the cusp of turning around and is fast closing in on its North American segment.

Cruise

Cruise revenue, profit and margin

Cruise is responsible for the development and commercialization of AV (Autonomous Vehicle) technology for General Motors and is a separate business entity from the automotive segment.

As seen in the chart above, Cruise has little revenue or sales and generated only $102 million of revenue in 2022, roughly in line with that of 2021.

While Cruise’s revenue generation has made little progress, it has suffered massive losses all these years.

In other words, Cruise not only made no profits all these years but also incurred steep losses.

As shown, Cruise has already incurred a loss of $1.9 billion in adjusted EBIT as of 31 December 2022, the biggest loss ever reported and was nearly double that of the prior year.

Far from over, Cruise’s losses have been getting bigger since its inception and the loss in 2022 would probably be the sector’s steepest.

Since Cruise’s losses were so deep, the respective margin was not meaningfully to be shown.

Therefore, there is no margin shown in the chart above for Cruise.

GM Financial

GM Financial revenue, profit and margin

GM Financial is the captive finance arm of General Motors.

This wholly-owned subsidiary provides automotive financing services to not only retail customers but also dealership owners.

GM Financial’s revenue comprises leased vehicle income, retail finance charge income, and commercial finance charge income.

As seen in the chart above, GM Financial had been rising considerably prior to 2020 and topped nearly $15 billion in 2019.

However, GM Financial’s revenue started to decline in 2020 and totaled only $13 billion as of 2022.

While GM Financial makes about the same sales figures as GMI and only about 10% of GMNA’s revenue, its profitability and margin have been quite impressive.

For example, in 2022, GM Financial made about $13 billion in revenue and generated a profit of $4 billion in adjusted EBT.

The result represents a margin that topped 32% and was the highest among GMNA and GMI.

More importantly, GM Financial’s profitability and margin have been on the rise while revenue has been on a decline.

As seen, GM Financial’s profitability and margin in 2022 were second only to that of 2021 while revenue was significantly down.

Also worth mentioning is that GM Financial’s profits and margins between 2019 and 2021 were hardly impacted by COVID-19 as well as supply chain disruptions.

Despite the declining revenue in 2020, the respective EBT-adjusted profit and margin grew considerably from that of 2019.

In short, GM Financial is a much more resilient and profitable business segment compared to the automotive segment of GMNA and GMI.

Revenue Share By Segment

GM revenue share by segment

GMNA’s revenue contribution topped 82% of total sales as of 2022 and has been on a rise in the last several years.

In contrast, GMI’s revenue contribution declined to a record low of only 10% as of 2022.

While GM Financial’s revenue share had been on the rise in the past, it went significantly lower as of 2022 to only 8% of total revenue.

Cruise’s revenue contribution has been insignificant all these years, topping less than 1%.

Therefore, the North American region had been the biggest market for General Motors, contributing 82% of sales to total revenue in 2022.

Revenue By Segment Growth Rates

GM revenue by segment growth rates

From the perspective of growth rates, we can see that 2022 was the best year for General Motors.

As seen, GM recorded the best revenue growth for its automotive sectors in 2022.

For instance, GMNA’s revenue grew 27% year-on-year in 2022 while GMI’s growth rate also came in at 27% year-over-year in the same year.

A turnaround has been happening in the automotive segment since 2021 as shown by the positive growth rates recorded in both GMNA and GMI.

On the other hand, Cruise’s revenue declined by 3.4% in 2022 while the revenue growth for GM Financial tumbled to 5% in the same year.

A trend worth taking a look at was the declining revenue growth for GM Financial.

GM Financial used to grow at high double digits growth rates.

However, GM Financial’s sales had been on a decline since 2020, with 2022 being the worst.

On a global basis, GM’s total revenue grew by 23% in 2022 over 2021.

Conclusion

Of all the business segments, GM North America produced not just the biggest revenue but also the largest profit on an absolute value basis.

In contrast, Cruise’s revenue had been insignificant and had incurred massive losses all these years.

While GMNA produces the largest revenue and profit, it has not been the most profitable business sector.

For example, GM North America’s EBIT-adjusted margin came in at only 10% in 2022, which was far lower than GM Financial’s EBT-adjusted margin of 32% reported in the same year.

Similarly, GM International also made considerably less profit despite having revenue that topped $15 billion in 2022.

That said, GMI’s EBIT-adjusted margin came in at only 7.4% as of 2022, which was even lower than the North American region.

In short, GM Financial made the cut as the most profitable business sector, with an EBT-adjusted margin totaling a massive 32% as of 2022.

References and Credits

1. All financial figures in this article were obtained and referenced from GM’s quarterly and annual statements available in General Motors Investor Relations.

2. GMC Sierra HD Denali image is used under creative commons license and sourced from the following websites: GMC Sierra.

Disclosure

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

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