General Motors on Wednesday said it had continued to feel the impact of the financial crisis in its third quarter sales but that the US had reached the bottom of its economic downturn.
The US carmaker sold 2.1m vehicles in the most recent quarter, a drop of 11.4 per cent from the same quarter last year, bringing its year-to-date sales to 6.7m, down 5.8 per cent on a year ago.
However, he mentioned the strengthening dollar, falling oil and commodity prices and rising housing starts as “positives” for GM’s business, in spite of a generally grim US car market. Actions taken by US authorities to stabilise financial markets would lay the groundwork for recovery.
“We believe the US is probably in the trough of its downturn right now,” he said.
GM reported higher sales in Brazil, Russia, India and China in the third quarter but said growth in emerging markets was slowing, and the rise did not make up for the slump in its US business.
It said that overall global industry car sales fell by 1m to 16.2m in the quarter, down 6 per cent from a year ago. The US market, where the housing crisis, higher petrol prices and the credit crunch have sapped consumer confidence, accounted for about two-thirds of the drop.
The US’s largest carmaker narrowly outsold Toyota last year, just holding on to its title as the global industry’s largest-selling producer.
Toyota, which in July downgraded its annual sales forecast for this year to 9.5m units, is due to report its third-quarter sales data with its financial results next week.
GM’s sales in North America fell by 18.9 per cent in the third quarter, and by 12.3 per cent in Europe. Opel and Vauxhall, the carmaker’s biggest European marques, reported a 16 per cent slump in third-quarter sales, a bigger drop than the overall market.
Jonathan Browning, the company’s vice-president responsible for global sales, service and marketing, attributed the two brands’ slide to their large presence in the UK and Spain, two of Europe’s weakest car markets this year.
GM is burning through about $1bn a month as it copes with flagging consumer confidence and this year’s spike in petrol prices, which have caused a collapse in demand for its biggest and most profitable vehicles.
The company is talking to Chrysler about a merger, and to the US government about possible financial backing.
As GM’s US business shrinks, the relative weight of its overseas operations continues to grow. The group made 63 per cent of its sales outside the US in the third quarter, compared with 58 per cent last year.
GM’s sales in Latin America rose by 3.4 per cent, and were up 2.6 per cent in Asia in the third quarter.
Carmakers, including GM, have been quick to cut costs and reduce inventories in the face of the slowdown.
Mr DiGiovanni said: “Once we start growing again, productivity will be greatly enhanced.”
