For online stock trading, it would seem attractive to secure some stock in one of the world’s largest automobile manufacturers.
Why GM Is More Attractive Now than Before
General Motors (GM) could be an attractive stock to check out. There are many factors leading to such an opinion by analysts. One of the world’s most prolific automobile manufacturers, GM has gone through some tough times such as the 2009 bankruptcy filing. But it has changed a lot since then, and is now in quite a strong position financially with good sales and cash flows. While GM reported an around 2% revenue loss in the FY 2015, it did experience a rise in its earnings per share by 258.18% and net income by 145.32%. And the company has various plans in place to deal with the industry disruptions that might come its way while setting trends and adapting them.
Based on the latest June 2016 figures, General Motors held the market leader tag with a share of 16.9% with Ford closely following at 15.8%. The third spot was jointly held by Toyota and Chrysler with 13.1% each. Company sources indicate that GM has increased its retail market share in the past 13 months. In 2016’s first six months, GM retail sales increased by 1% and retail share moved up 0.4%, which sources indicated is the largest gain in retail share experienced by a full-line automobile manufacturer. It was also double the industry average in the particular timeframe.
GM's China Success Story and Future Plans
GM has also announced its plan to grow significantly more in China, which surely is a winning strategy since the market has not been significantly affected by the surrounding trends. The country’s soaring middle class is aiming to move up in life and acquire new luxuries. Automobiles are certainly on the top of the shopping list. And GM is seeking to cache in on that though it already has established a presence in the country.
GM plans to launch over 60 new as well as refreshed models in the country, particularly SUVs, luxury vehicles and MPVs. In the first half of this year, General Motors and its JVs already set a record in China by selling 1,810,476 units which was 5.3% greater than what was achieved in the first half of last year. Cadillac, Buick and Baojun were the GM brands that experienced the maximum success in this period.
Preparing for the Transforming Trends of Mobility
GM’s China focus puts the company on a solid and stable path. The company is also looking at mobility transformation in line with the growing trend of ride-sharing and autonomous vehicles. The demands of customers are changing because of their evolving needs. General Motors has made the steps to capitalize on this:
- It announced a long-term strategic partnership with Lyft for making on-demand autonomous vehicles available in the US through a network. GM has infused $500 million in Lyft as part of this alliance. This is a great opportunity for giving Lyft’s customers access to or awareness of GM’s model line, which would lead to GM’s clientele widening significantly.
- You might remember that GM bought Cruise Automation in March 2016 for accelerating its autonomous vehicle technology. The results of the labor will be evident on the 2017 Cadillac CT6 featuring “Super Cruise” technology. This will be a hands-free experience for driving, and goes further than the usual cruise control feature. GM’s autonomous system on the CT6 is also conceived for stop-and-go traffic!
- GM is also set to commence production of the electric Chevrolet Bolt by October.
- The company has announced the launch of its Maven car sharing service which helps it to bring its many brands under a single label.
General Motors' shares are currently 7.59% down year-to-date. They have a 52-week high/low in the region of $36.88/$24.62. The company, as we’ve seen above, is strong in many significant and crucial areas. But various factors have made these aspects not impact GM’s share prices. These shares are now attractive buys because you don’t have just the current impact and performance of the company to consider, but also the immense potential for the future thanks to the investments the company is making in the right direction. The company’s emerging financial strength and attractive dividend payout of 4.86% also make GM shares an attractive value stock proposition.
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