Ford Motor Company (F): Is General Motors Company (GM) a Better Investment Than Its Peers?

General Motors Company (NYSE:GM) has made phenomenal improvements over the past several years. Its vehicles’ quality and design have improved, costs have dropped, and management has capitalized on opportunities throughout the world. However, General Motors Company (NYSE:GM) is still at the mercy of global demand. In this article, we’ll determine whether GM is a better investment than its peers.

General Motors Company (NYSE:GM)

Regional breakdown

The table below shows GM’s wholesale vehicle sales for the second quarters of 2012 and 2013. Wholesale sales data is GM’s largest revenue component — and therefore, its most important:

Sales Region 2012 2013
North & Central America and the Caribbean 760,000 809,000
Western Europe 290,000 276,000
Asia, the Middle East, Africa, and Eastern Europe 295,000 268,000
South America 265,000 278,000
TOTAL 1,631,000 1,610,000

Source: GM 10-Q for Q2 2012 and 2013.

As you can see, there has been a slight decline in total sales. While North and South America have been strong, sales in GM’s other regions have weakened.

Now let’s take a look at year-over-year market-share movement for the second quarter, based on General Motors Company (NYSE:GM)’s estimates.

Sales Region 2012 2013
North & Central American and the Caribbean 17% 17.2%
Western Europe 8.5% 8.4%
Asia, the Middle East, Africa, and Eastern Europe 9.3% 9.4%
South America 18.2% 17.2%

Source: GM 10-Q for Q2 2012 and 2013.

Important updates

General Motors Company (NYSE:GM) made another strategic move this past April, limiting costs over the next seven years by finalizing labor-agreement deals in Germany and Spain. You want to see this kind of long-term approach from any management team you invest in. General Motors Company (NYSE:GM) also plans on ending vehicle production at Bochum, Germany by the end of next year, which will reduce headcount and further cut costs.

On the negative side, General Motors Company (NYSE:GM) had halted production at a plant in St. Petersburg, Russia, due to slowing demand. It has recently resumed production, but the shutdown was two weeks longer than normal, and a weakening demand environment doesn’t sound good.

General Motors isn’t the only company seeing slowing demand in Russia. Ford Motor Company (NYSE:F) is also cutting production in the country because of slowing demand, especially for compact cars. The Association of European Business in Russia has stated that the auto market there has cooled, according to a Dow Jones report on Nasdaq.com

If you’re considering an investment in Ford Motor Company (NYSE:F), as opposed to General Motors, consider that they tend to trade closely together.