Monday, May 14, 2007

GM to raise non-U.S. sales above 60%

Saturday, May 05, 2007
GM to raise non-U.S. sales above 60%
CEO Rick Wagoner says he hopes the increase doesn't come at the expense of domestic sales.
Greg Bensinger / Bloomberg News

General Motors Corp. plans to increase sales outside the U.S. to more than 60 percent of the company's total, as its domestic sales decline.

The automaker reached 60 percent in the first quarter because of increases in China and other emerging markets.

"That number is just going to continue to grow," Chief Executive Officer Rick Wagoner said Friday on a conference call from New York.

"I hope not by reducing our sales in the U.S."

GM may lose lead to Toyota

GM expects to sell 9.2 million vehicles worldwide this year, company sales analyst Paul Ballew said on the call.

It would be Detroit-based GM's highest total since 9.55 million in 1978.

That may not be enough to fend off a challenge for the annual global sales lead from Toyota Motor Corp., which has forecast sales of 9.34 million vehicles this year.

Toyota sold 2.35 million vehicles worldwide in the first quarter, beating GM's 2.26 million and threatening the U.S. company's 76-year reign as the world's biggest automaker.

GM hasn't 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 two years.

GM said first-quarter profit fell 90 percent to $62 million.

Markets outside the U.S. may eventually account for two- thirds of the company's vehicle sales, Ballew said.

Forecasting a record

"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.

During the past six weeks, GM has "seen some softness in large-truck sales in the U.S.," mainly because of rising gasoline prices, Ballew said.

The company's large sport-utility vehicles have been most affected, he said. GM on May 1 reported April declines of 26 percent for the GMC Yukon large SUV and 12 percent for the similar-sized Chevrolet Tahoe.

GM's 8.375 percent note due July 2033 fell 0.44 cent to 91 cents on the dollar, yielding 9.3 percent, according to Trace, the NASD's bond-price reporting service.

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