uploads/2018/05/5-6.png

Why General Motors’ Global Market Share Fell in 1Q18

By

Updated

GM’s market share

In 1Q18, General Motors’ (GM) total market share fell to 11.4% year-over-year in its participating markets, compared to 11.6% in 1Q17. The company’s 1Q18 worldwide market share fell to 9.0% from 10.4% in 1Q17. Nevertheless, GM maintained the largest market share in the US ahead of Ford (F), Toyota (TM), and Fiat Chrysler (FCAU)

In 2017, GM stood at the fourth position in the list of the largest automakers by their global vehicle sales (IYK) volume after Renault-Nissan, Volkswagen (VLKAY), and Toyota. Let’s take a closer look at the company’s 1Q18 market share.

Article continues below advertisement

1Q18 US market share expanded

According to General Motors’ estimates presented in its 1Q18 earnings report, its US market share during the quarter was 17.0%, up from 16.8% in 1Q17. For the last few years, GM has been intentionally cutting its US fleet sales to rental car companies in order to boost its profit margins. The company wanted to utilize its plant capacity to manufacture more profitable vehicles for the retail customer. GM’s exit from Europe in 2017 has also driven its global market share down.

Crossover market share rose

In general, trucks and crossovers tend to yield higher margins than smaller cars for auto companies. In 1Q18, GM’s US market share in the US truck segment dropped to 24.8% from 25.2% in 1Q17. On the positive side, the company registered an increase in its crossover segment US market share from 15.1% in 1Q17 to 16.4% in 1Q18.

GM generates the majority of its revenues from the US market. In such a scenario, a year-over-year increase in the US crossover segment market share and stable truck segment market share could be positive indicators. The company’s dropping global market share was a reflection of GM’s discontinued sales in its unprofitable international markets, which included Europe and India in 2017.

Next, we’ll take a look at GM Financial Company’s 1Q18 performance.

Advertisement

More From Market Realist