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GM Revenue Breakdown By Segment, Profitability And Margin

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.

GMNA meets the demands of customers in North America and GMI primarily 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 to not only retail customers but also dealers.

In this article, we will explore not only the revenue breakdown by segment or by region but also the profits and margins of each segment to find out which GM’s business makes or losses the most money.

Let’s get started!

GM Revenue Breakdown, Profit And Margin Topics
1. GM North America
2. GM International
3. Cruise
4. GM Financial
5. Conclusion

GM North America (GMNA)

GMNA revenue, profit and margin

GMNA revenue, profit and margin

* GMNA’s revenue, EBIT-adjusted and EBIT-adjusted margin are obtained directly from the company’s annual report.
* GM’s fiscal year begins on Jan 1 and ends on Dec 31.

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

In terms of revenue growth, GMNA’s revenue trend has been on a decline in the last 6 years since 2016.

As of 2021, GMNA’s revenue totaled only $101 billion, up 5% from 2020 but down 5% from 2019.

Since 2016, GMNA’s revenue has been down 15%, or roughly 3% per year.

In 2022 up to Q3, GMNA’s revenue totaled $93 billion, up nearly 25% 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 $10.3 billion in 2021, up 14% from 2020 and a massive 26% from 2019.

In 2022 up to Q3, GMNA made a profit of $9.3 billion in EBIT-adjusted out of $93 billion of revenue, also a significant growth from the same period in 2021.

For margin, GMNA’s EBIT-adjusted margins hover around 10% on average but this number was down significantly in 2019 to only 7.7%.

Since 2019, GMNA’s EBIT-adjusted margin has been going up and clocked 10% as of 2022 year-to-date.

While GMNA’s revenue has been trending down in the last 6 years, the respective profits and margins have remained steady since 2021, notably at $10 billion and 10%, respectively.

In 2022, GMNA’s EBIT-adjusted profit and margin will most likely top $10 billion and 10%, respectively, when the company reported the 2022 final result in 1Q 2023.

GM International (GMI)

GMI revenue, profit and margin

GMI revenue, profit and margin

* GMI’s revenue, EBIT-adjusted, and EBIT-adjusted margin are obtained directly from the company’s annual report.
* GM’s fiscal year begins on Jan 1 and ends on Dec 31.

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 2021, GMI’s revenue came in at only $12 billion USD, which was significantly less than GMNA’s $101 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 $11 billion as of 3Q and is expected to significantly outperform that of 2021 full-year by a wide margin when the company reports its 2022 final year result in Q1 2023.

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

For example, GMI made only $827 million in adjusted EBIT in 2021 out of $12 billion in sales revenue. This translate to roughly an adjusted EBIT margin of 6.8%, 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.

Therefore, GMI is expected to generate record profit and margin for fiscal 2022.

As of 3Q 2022, GMI’s adjusted EBIT has already topped $11 billion while the respective margin has already reached a record high of 7.8% for the 9 months ended 30 September 2022, a profitability that has never been seen in the last 6 years.

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 revenue, profit and margin

* Cruise’s revenue, EBIT-adjusted, and EBIT-adjusted margin are obtained directly from the company’s annual report.
* GM’s fiscal year begins on Jan 1 and ends on Dec 31.

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 $106 million of revenue in 2021.

Similarly, Cruise made only $76 million in revenue for the 9 months that ended 30 September 2022, not much change from the prior year.

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 $1.4 billion in adjusted EBIT in the 9 months that ended 30 Sept 2022, the biggest loss ever reported and was much higher than the prior year despite having only a 9-month result in 2022.

Therefore, Cruise will have the biggest loss for fiscal 2022 when it reported its full-year result in 2023.

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.

GM Financial

GM Financial revenue, profit and margin

GM Financial revenue, profit and margin

* GM Financial’s revenue, EBT-adjusted, and EBT-adjusted margin are obtained directly from the company’s annual report.
* GM Financial uses the EBT-adjusted instead of EBIT-adjusted because interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment.
* GM’s fiscal year begins on Jan 1 and ends on Dec 31.

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 $9.5 billion as of 2022 for the first nine months.

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 2021, GM Financial made about $13.4 billion in revenue and generated a profit of $5 billion in adjusted EBT, giving a margin that nearly topped 40% and was much higher than that of GMNA as well as GMI.

Similarly, GM Financial’s profit and margin came in at $3.3 billion and 35%, respectively, despite earning only $9.5 billion in revenue in the first 9-month of 2022.

More importantly, GM Financial’s profitability and margin have been on a rise since 2016 as shown in the chart above despite the declining sales revenue.

As seen, GM Financial’s profitability and margin in 2021 was at a record high in the last 6 years and the result in 2022 will likely follow suit.

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 profitable business segment compared to the automotive segment of GMNA and GMI.

Conclusion

Of all the revenue segments, GM North America produced the biggest profit on an absolute value basis while Cruise incurred massive losses all these years.

Moreover, Cruise also has not been able to generate any meaningful revenue all these years and the latest figure shows that its sales were only $106 million in 2021 and $76 million in 2022 as of Q3.

Despite having the largest revenue and profitability, GM North America wasn’t the most profitable sector.

On the contrary, it was GM Financial that had been the most profitable business segment when the respective EBT-adjusted margin topped 38% in 2021 and 35% in 2022.

While GM International’s sales revenue has been on a decline, its profitability and margin have been on a rise and topped record highs for the 9 months that ended September 2022.

Perhaps, a turnaround is happenning for GMI.

References and Credits

1. Financial figures in all charts above 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.

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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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