Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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

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.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.