GM’s Revenue To Tighten Amid Global Auto Market Slowdown
General Motors (NYSE: GM), is being hit by a major strike by more than 50,000 workers and this can potentially cost them nearly $100 million in revenue per day. Its stock is currently trading at around $37. The company generates its revenue primarily from its North America segment which is projected to account for 75.2% of total revenues in 2019, While the International segment is expected to be the 2nd highest contributor to the Top line at 13.4%. In this note we discuss the revenue segments of General Motors, their historical performance, and expected Total Revenue for 2019. You can look at our interactive dashboard analysis ~ General Motors’ Revenue: How does General Motors make money? ~ for more details. In addition, here is more Consumer Discretionary data.
General Motors Business Model:
What Does GM offer?
- General Motors, or GM, was originally founded in September, 1908. They design, build, and sell trucks, crossovers, cars, and automobile parts worldwide. They also provide automotive financing services through GM Financial. The company’s major brands are Buick, Cadillac, Chevrolet, and GMC.
Has 4 Operating Segments-
- GM North America (GMNA): GMNA meets the demands of customers in North America with vehicles developed, manufactured, and/or marketed under the Buick, Cadillac, Chevrolet, and GMC brands.
- GM International (GMI): GMI primarily meets the demands of customers outside North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet, GMC, and Holden brands.
- GM China: They also have equity ownership stakes in entities that meet the demands of customers primarily in China, with vehicles developed, manufactured and/or marketed under the Baojun, Buick, Cadillac, Chevrolet, Jiefang, and Wuling brands.
- GM Financial Services: GM Financial provides retail loan and lease lending across the credit spectrum. Additionally, GM Financial offers commercial lending products to dealers including new and used vehicle inventory floorplan financing and dealer loans, that are loans to finance improvements to dealership facilities, to provide working capital, and to purchase and/or finance dealership real estate.
What Are The Alternatives?
- Major competitors are companies like Volkswagen, Toyota Motors, Daimler AG, Tata Motors, and Ford.
What Is The Basis of Competition?
- The principal factors that determine consumer vehicle preferences in the markets in which GM operates include overall vehicle design, price, quality, available options, safety, reliability, fuel economy, and functionality. Market leadership in individual countries in which they compete varies widely.
Revenue expected to be around $147.4 billion, primarily from contribution of GM North America:
- Total Revenue saw a small growth in 2018 to $149.1 billion primarily due to improvement in the North America segment. Trefis estimates revenue to be around $147.4 billion in 2019.
- In 2018 there was a slight increase in North America revenue primarily due to better pricing. In 2019 the segment is expected to go down a bit as the shrinking market would lower the volumes sold for the year. Expected revenue for 2019 is $110.9 billion.
- In 2018 there was a fall in revenue from International operations as the sales volume fell. In 2019 the segment is expected to grow a bit due to higher average revenue per vehicle. Expected Revenue for 2019 is $19.7 billion.
- China is one of the biggest markets with huge potential across the world, as GM has increased its revenue (equity income) from China to around $2 billion in 2018. GM is expected to continue increasing its market share and volume steadily across China. Expected Revenue for 2019 is $2.1 billion.
- GM Financial Revenue has seen steady growth over the last couple of years as it rose from $12.1 billion in 2017 to $14 billion in 2018. Trefis estimates the segment revenue to increase to $14.8 billion in 2019 as segment assets grow.
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