GM moving trucks out of Kokomo again
Recent financials show automaker having record year despite chip shortage
Today’s article is brought to you by Freedom Financial.
Car carriers are busy on the lots of General Motors Components Holdings (GMCH) in Kokomo once again. The thousands of incomplete pick-up trucks are gradually disappearing. The move falls in line with what General Motors detailed in its financial disclosures earlier this summer, and it bodes well for a company that already is enjoying a banner year for sales.
At the end of the second quarter of 2022, GM reported having approximately 95,000 incomplete vehicles in its inventory due to the ongoing global semiconductor chip shortage. As Kokomo’s residents can attest, the company projected in its filing with the Securities and Exchange Commission that “substantially all of these vehicles will be completed and sold to dealers before the end of 2022.”
Sure enough, the trucks are moving. And that’s good for GM. It projected that net income for the company in 2022 will hit a range of $9.6 billion to $11.2 billion. How does that stack up with the company’s past performance and against the competition? GM is growing.
In the company’s quarterly earnings report, released at the end of June, GM reported sales were down 15 percent year over year in the second quarter, yet its market share increased one percent to 16.3 percent of the U.S. market. It was the third consecutive quarter of market share gains for the auto manufacturer.
“GM’s sales and market share have grown each of the last three quarters, even with lingering supply chain disruptions,” said Steve Carlisle, GM executive vice president and president, North America. “Our long-term momentum will continue to build thanks to the launches of groundbreaking new EVs like the GMC HUMMER EV and Cadillac LYRIQ, and the tremendous customer response to the Chevrolet Silverado and GMC Sierra.”
GM performed even better in the pick-up truck market. It increased market share for the 13th consecutive quarter in that segment, selling 203,041 Chevrolet Silverados and GMC Sierras. Together, the trucks account for 44 percent of the U.S. market. According to J.D. Powers and Associates, the Silverado is the fastest growing full-size pick-up in the U.S.
And that’s with thousands of incomplete trucks sitting in Kokomo. GM ended June 2022 with just 247,839 vehicles in dealer inventory. The 95,000 incomplete vehicles are now entering that inventory gradually, which should translate into a robust sales performance in the final two quarters of the year if demand continues to be strong.
“We appreciate the patience and loyalty of our dealers and customers as we strive to meet significant pent-up demand for our products, and we will work with our suppliers and manufacturing and logistics teams to deliver all the units held at our plants as quickly as possible,” said Carlisle.
Other details of GM’s quarterly report included:
· Pent-up demand and improved availability helped drive large year-over-year increases in deliveries of the Chevrolet Camaro, up 63 percent; Chevrolet Colorado, up 52 percent; Chevrolet Malibu, up 563 percent; Cadillac XT4, up 116 percent; and Cadillac CT5, up 70 percent.
· Total sales of the GMC Canyon grew 40 percent and GMC Terrain grew 37 percent in the quarter. The GMC Sierra HD, which was up 31 percent in the quarter, delivered its best second quarter and first half on record.
· GM’s commercial, government and daily rental deliveries were up a combined 29 percent, with each category posting double-digit growth as customers took advantage of improved availability to refresh and expand their fleets, which reflects strong employment and the recovery in the travel and leisure industries. Sales to commercial and government customers were 73 percent of the fleet sales mix.
· Commercial demand was especially strong for full-size vans, up 12 percent; full-size pickups, up 14 percent; medium-duty trucks, up 13 percent; and midsize pickups up 65 percent.
· Electric vehicle sales were over 7,300 units, including some of the first deliveries of the BrightDrop Zevo 600 and GMC HUMMER EV Pickup, as well as the resumption of Chevrolet Bolt EV and Bolt EUV production.
· Cadillac LYRIQ production is accelerating, with initial deliveries in process. Orders for the 2023 model year sold out within hours, and preorders for the 2024 model opened on June 22. GM will gradually increase production of the Cadillac LYRIQ and GMC HUMMER EV Pickup in the second half of 2022. Ultium Cells LLC begins producing cells in Ohio to support expanded EV manufacturing starting in August.
(Sources: General Motors Quarterly Earnings Report, 7/1/2022; General Motors’ SEC Form 8-K financial report, 7/1/2022)