General Motors Company (GM - Free Report) has reported June U.S. retail sales of 202,908 vehicles, reflecting a 3% decline from the comparable quarter last year. However, the company’s U.S. crossover retail sales line has increased 23% from the year-ago period. This rise was mainly due to the Chevrolet Equinox unit volume, which was up 36% in June. The company’s upscale automobile brand Buick’s U.S. retail sales also increased 6%.
U.S. Commercial sales surged 36% last month, marking the best June since 2006. The combined sales of both Commercial and Government segments were 77% of General Motors’ fleet sales for the month. However, daily rental sales were down nearly 54% or 11,000 vehicles.
The combined sales of other segments, which include mid crossovers, compact crossovers and utilities, were 22% on a U.S. retail sales basis compared with the year-ago period.
Total sales of the company were 243,155 vehicles, reflecting a decline of 5% from the prior-year period. The best performers in June were Chevrolet, Buick, GMC and Cadillac models.
Good news is that the American automaker is already in the middle of launching all-new crossovers into the U.S. market. So far in 2017, General Motors has unveiled Chevrolet Bolt EV and Equinox models. Earlier, in 2016, GMC Acadia and Cadillac XT5 were unpacked.
By 2017-end, it expects to offer a wide range of crossovers. The company will also be observing market conditions and accordingly, make extra production adjustments.
The automobile manufacturer has also provided a positive outlook in the U.S. retail vehicle sales, predicting a strong demand in the second half of the year.
The company believes that continuous enforcement of its strategic plan will help in achieving the adjusted earnings before interest and tax (EBIT) margin of 9–10% by early next decade. To meet this target, the company needs to drive sustainable growth in its core business and focus on several other initiatives. The automaker strives to excel in its product line and technology besides expanding its Chevrolet and Cadillac brands globally.
General Motors' shares have underperformed the Zacks categorized Automotive-Domestic industry in the last three months. The company’s shares have risen 2.5% compared with the industry’s growth of 6.4%.
Zacks Rank & Key Picks
General Motors currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Allison Transmission Holdings Inc. (ALSN - Free Report) , Cummins Ins. (CMI - Free Report) and Continental AG (CTTAY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expected long-term growth rate for Allison Transmission, Cummins and Continental are 11%, 11.7% and 7.8%, respectively.
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