Why The New GMC Terrain Model Could Help Boost GM’s Bottom Line
General Motors (NYSE:GM) ended 2016 as the highest selling car manufacturer in the U.S. auto market in 2016. The company grew its market share to 18.9% compared to 17.3% in 2015. However, these record sales levels might not translate into record profitability as sales in some key segments were low. For example, the third highest growing sub segment in the U.S. auto market, behind large SUVs and large vans, was the crossover segment, which grew by 8.5%. However, GM’s two vehicles in the segment—Chevrolet Equinox and GMC Terrain—saw their sales decline by 12.8% and 21.5%.
The key thing to note about the table above is that, excluding GM’s crossovers, sales from the group of models increased by 8.7% in 2016, slightly higher than overall market growth. However, the good news for GM investors is that the company’s all new 2018 version of the GMC Terrain can help reverse this trend. The company showcased the new version of the Crossover at the North American International Auto Show. It features more fuel-efficient engines and is lighter and smaller. This is the first update the vehicle has gotten since 2009 and since new models fetch higher prices should help boost the company’s profit margins.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for General Motors
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