In 1Q17, General Motors (GM) maintained the largest market share in the US auto market ahead of Ford (F), Toyota (TM), and Fiat Chrysler (FCAU). In 2016, General Motors was third on the list of the largest global automakers by vehicle sales volume in the world. Let’s take a closer look.
General Motors released its 1Q17 earnings on April 28, 2017. Read GM’s 1Q17 Earnings Review: Solid Growth in the Home Market to learn about the company’s 1Q17 revenues and margins.
Stronger US market share
According to General Motors’ estimates presented in its 1Q17 earnings report, its US market share during the quarter was at 16.8%—higher than 16.4% a year ago.
In 4Q16, the company reported US market share of 17.0%—lower than its market share of 17.3% in 4Q15.
For the last few years, General Motors has been cutting its fleet sales to rental car companies in order to boost its margins. It wanted to utilize its plant capacity to manufacture other more profitable vehicles for retail customers. The profitability from fleet sales tends to be lower than the profitability from retail vehicle sales. While the strategy of cutting fleet sales had a positive impact on General Motors’ profitability, it took a toll on its margins.
Higher truck and SUV market share
Trucks and crossovers tend to yield higher margins than smaller cars for automakers. In 1Q17, General Motors’ US market share in the truck segment rose marginally to 25.3% from 25.2% a year ago. The company reported a significant rise in the US crossover segment’s market share, which was at 15.1% in 1Q17—up from 13.8% in 1Q16.
General Motors generates most of its revenues from the US market. In the last few years, small car sales underperformed truck and crossover sales in the US. In such a scenario, an increase in the market share for US truck and crossover segments could be a positive sign.
Other mainstream automakers (XLY) including Ford, Toyota, and Fiat Chrysler also generate a significant portion of their revenues from the US market.
Next, we’ll take a look at how GM Financial performed in 1Q17.