Sunday marks the anniversary of GM’s initial public stock offering in November 2010. The company has made money for 11 straight quarters, piling up more than $16 billion in profits. Its cars and trucks are selling for good prices. And sales are strong in China.
But there are signs of trouble. GM’s U.S. sales, the prime driver of its profits, aren’t rising as quickly as the overall market. There’s been turmoil in the executive ranks, and the company is hemorrhaging cash in Europe.
GM is making money — nearly $4 billion so far this year. Most of that came from the U.S., where GM cars and trucks are selling for almost 6 percent more than they did in January of 2011. The average selling price is $32,662, says the TrueCar.com auto pricing site. GM also is making good money in China and the rest of Asia, and it has turned around its money-losing South American operations with a host of new products.
Before its 2009 bankruptcy, GM relied on trucks and SUVs to make money. Cars were an afterthought, and GM got a reputation for poor quality. The business model worked fine until gas prices spiked over $3 per gallon around 2005 and buyers shifted toward cars. Since bankruptcy, the company has rolled out new compact, subcompact and mini cars that are selling well. Car-based crossovers, which are more efficient than traditional truck-based SUVs, also are selling. Trucks accounted for 32 percent of GM sales in 2008, with cars and crossovers making up 68 percent. Now, trucks are down to 27 percent. Sales of the Chevrolet Cruze compact are closing in on 200,000 through October, far better than GM’s previous compact and a strong counterpunch to Toyota and Honda. Also, the Chevy Sonic, the only subcompact made in the U.S., has become the top car in its segment with more than 70,000 sales this year. That’s more than 10 times the number of subcompacts that GM sold in the first 10 months of 2011.