About three-quarters of General Motors’ car and truck sales will come from outside the U.S. within a decade, Chief Executive Officer Rick Wagoner told Bloomberg Television in an interview.
GM plans to push sales in the fastest-growing markets as demand in the U.S. stagnates, Wagoner said. In the third quarter of last year, 58% of GM’s sales came from outside its home market. GM relied on the U.S. for most of its volume as recently as 2004.
Auto analyst John Casesa, managing partner at Casesa Shapiro Group in New York, told Bloomberg, that’s the kind of sales mix “that will eventually save GM.†Casesa said: `Overseas growth is an absolute necessity if GM is going to compete, not just with Toyota, but with emerging market automakers.”
Wagoner said GM has the cash and momentum to keep pace with global competitors, led by Toyota, which is threatening to end GM’s 76-year reign as the industry’s biggest company.
GM kept its lead over Toyota globally through September with 7.06 million sales, for a margin of 10,000. At the end of the first half, Toyota led by 39,000 vehicles. Yearend totals will be announced this month.
Wagoner told Bloomberg preliminary results indicate GM set 2007 sales records in Europe, Asia and other non-North American markets, while U.S. volume fell for the eighth straight year.
“I don’t concede anything at all,” Wagoner told Bloomberg. “GM has very aggressive growth plans in 2008, particularly if you look at markets like China, India, Brazil and Russia.”
On the profit side, GM lost $38 billion through September. Profits overseas couldn’t offset doemstic losses and a $39 billion third-quarter deficit due mostly to a writedown of the value of future tax benefits.
Wagoner said his plan to end losses in North America is about 50 percent to 60 percent complete, with cost reductions from new labor agreements not yet contributing. Wagoner told Bloomberg GM plans to cut fixed expenses to 25% of revenue by 2010 from about 34% in 2005.
Wagoner said GM has “a reasonable prospect†for picking up some retail market share in the U.S. this year.
Source: GM’s Wagoner: Future Growth is Overseas
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