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Stronger Dollar Eats into General Motors’ Revenues

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Revenues

General Motors (GM) reported net revenues of $38.8 billion in 3Q15 as compared to $39.3 billion in the corresponding quarter last year. The falling revenues were attributable to a stronger US dollar. At constant currency rates, GM’s 3Q15 revenues were $2.3 billion higher year-over-year.

Ford’s (F) 3Q15 revenues are also expected to be negatively impacted by a stronger US dollar. However, Japanese (EWJ) automakers, including Honda Motor Company (HMC) and Toyota (TM), are expected to gain from the continued weakness of the Japanese yen versus the US dollar. Let’s now look at a breakdown of General Motors’s 3Q15 revenues.

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North America strong

  • General Motors reported revenues of $27.8 billion in 3Q15 in North America. This represents a strong year-over-year increase of 7.6%.
  • In Europe, General Motors reported net revenues of $4.6 billion. This is a fall of more than 11.5% compared to the corresponding quarter last year.
  • GM’s International Operations reported net revenues of $3.0 billion in 3Q15. In the corresponding quarter last year, the segment had posted revenues of $3.7 billion.
  • South America continued to be challenging for General Motors in 3Q15. The company posted net revenues of $1.7 billion in the region. This was a fall of more than 88% compared to the corresponding quarter last year.

Meanwhile, GM seems unfazed by its weakness in operations outside the United States. The company’s CEO (chief executive officer), Mary Barra, said, “These results reflect our work to capitalize on our strengths in the U.S. and China, while taking decisive, proactive steps to mitigate challenges elsewhere.”

Shipments and market share are other metrics that investors should closely watch. We’ll discuss these parameters in detail in the next part of this series.

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