In the late 90s and early 2000s Detroit’s Big Three automakers were known for poor vehicles and awful management decisions. No one wanted to buy their vehicles and hardly any investor wanted to touch their stocks with a 10-foot pole. It’s hard for some to believe that General Motors Company (NYSE:GM) is actually a valuable company to invest in – but I believe GM is a stock to buy now.
Gunning for that No. 1 spot
The two simplest parts of the investing equation are the top-line revenues and bottom-line profits. General Motors Company (NYSE:GM) has much work to do – copying Ford Motor Company (NYSE:F)‘s “One Ford Motor Company (NYSE:F)” strategy – to improve its lagging bottom-line profits. However, recent new vehicle sales and future catalysts clearly show GM could take the crown in global sales – feeding its top-line revenues. Here’s why GM is poised to overcome Toyota Motor Corporation (ADR) (NYSE:TM) and become the legitimate No. 1 automaker in the world.
Chevrolet does work
General Motors Company (NYSE:GM)’s largest brand, Chevrolet, sold over 1.18 million vehicles across the globe in the first quarter. If you’re counting like me, that makes it the 10th straight quarter of record global sales. The Chevrolet brand is doing well globally but is also up 4.8% compared to a year ago in the U.S. market, with 469,000 vehicles sold.
The 2014 Chevy Silverado – General Motors Company (NYSE:GM)’s most profitable vehicle – will try to steal market share from rival Ford Motor Company (NYSE:F) before it can release the next-generation F-150. GM’s new Silverado comes at a good time as the housing rebound is helping the full-size-truck segment surge and the older model was due for some updates to better compete.
GM currently has the oldest vehicle portfolio because it has lacked the funds to refresh or redesign its vehicles after bankruptcy. With its balance sheet finally improved GM is able to update its vehicles, and update it will. Look at what it has planned – it’s a doozy.
The plan is to refresh, redesign, or replace almost 90% of the vehicles sold in North America by the end of 2016. That’s about double the pace of the three-year period ending in 2012. Its largest brand, Chevrolet, is going to have 25 new or refreshed models all on its own – helping secure future vehicle sales. Let’s take a look at another very important brand for GM investors.