The General Motors Corp. intends to push sales outside the U.S. to more than 60 percent of the company's total as its domestic sales dip. Its Chief Executive Officer Rick Wagoner said that he hopes the increase does not come at the expense of their domestic sales.
The automaker reached 60 percent in the first quarter because of increases in China and other promising markets. "That number is just going to continue to grow," Wagoner said on Friday during a conference call from New York. "I hope not by reducing our sales in the U.S."
This year, the automaker intends to sell 9.2 million vehicles around the globe. This information was divulged by Paul Ballew, a sales analyst at GM. This year's target is GM's highest total since 9.55 million in 1978. But the number may not be enough to deflect a challenge for the annual global sales lead from its closest rival, the Toyota Motor Corp., which has the target sales of 9.34 million vehicles for the year 2007.
The fast rising Japanese automaker sold 2.35 million vehicles worldwide in the first quarter thus beating GM's 2.26 million and threatening the U.S. company's 76-year reign as the world's largest automaker.
Detroit-based automaker has not had an annual sales gain in the U.S. since 1999 and got 55 percent of its total outside its home market last year. The U.S. sales declines contributed to $12.4 billion in losses the past couple of years. GM said that their first-quarter profit declined 90 percent to $62 million.
Last year, the automaker has benefited from the $395 million sale of its stake in Suzuki Motors. GM also saw its profit margin declined in the first three months of the year for its European unit. The decline is pointed to the shift of consumers to smaller, fuel-efficient and affordable product lines. Also, the decrease is brought about by the Eastern and Central European nations that yield less income than those in the West.
The worst sales plague invaded North America. "It is not a favorable market," the GM Chief Financial Officer Fritz Henderson said in a conference call with both the analysts and reporters. "We're clearly not satisfied with generating a break-even or loss in North America. This reinforces the need to redouble our efforts."
Markets outside the U.S. may eventually account for two- thirds of the company's vehicle sales, Ballew said. "We will do well over 5 million units this year outside the U.S. market," he said. "That will be an all-time record for us." Last year, such sales totaled 4.2 million. GM's sales in its Asia-Pacific region probably will rise to 1.5 million this year, Ballew said. The region's total last year was 1.26 million.
In the past six weeks, the influential automaker has "seen some softness in large-truck sales in the U.S." The reasons behind the doldrums include the rising gasoline prices, Ballew said. GM's large sport-utility vehicles have been most affected, he said. On May 1, the automaker reported April declines of 26 percent for the GMC Yukon large SUV and 12 percent for the similar-sized Chevrolet Tahoe. The decline, which could not be shunned by , is so excruciating on the restructure plan of the company.
According to Trace, the NASD's bond-price reporting service, GM's 8.375 percent note due July 2033 declined 0.44 cent to 91 cents on the dollar, yielding 9.3 percent.
