Silverados and Cadillacs Drive Gains for General Motors Company (GM)

Nice gains for GM that go beyond pickups
Pickups aren’t the only big-profit products that are doing well for GM. Sales of its big SUVs like the Chevy Tahoe and GMC Yukon were up 30% on the month. Again, that’s a strong result for a family of products that will be replaced not long after General Motors Company (NYSE:GM)’s new pickups are launched, probably early next year.

But there’s another big story for GM, and that’s its Cadillac brand. GM has been investing heavily in a long-term plan to turn Cadillac into a serious global rival to the German luxury brands, part of a global effort by CEO Dan Akerson to improve GM’s profitability, which trails its biggest rivals. While that plan still has several years to unfold, some of the fruits are already showing up in Cadillac’s U.S. sales numbers.

The compact ATS sedan has been a critical and sales success for GM. Photo credit: General Motors.

Cadillac’s sales were up 39.9% in May, and are up 36.6% so far in 2013. What’s driving that growth? Simple: great new product. The ATS and XTS sedans, both introduced last year, have impressed critics — especially the ATS, a true rival to the Bayerische Motoren Werke AG (ETR:BMW) 3-Series that might be GM’s best-ever sedan. Both have given Cadillac’s overall sales numbers a big boost — even as sales of the brand’s longtime mainstay sedan, the CTS, decline in anticipation of the all-new version due this fall.

But GM had decent sales across the board. Its crossovers continued to score nice gains, and GM’s small cars — the Chevy Spark, Sonic, and Cruze, and the Buick Verano — were up 27% as a group in May.

The upshot: There’s good news for GM’s profits here
Long story short, while GM’s overall sales increase didn’t meet analysts’ expectations because of a surprise dip in fleet sales, the strong gains in key segments continue to show that GM is on the right track. The company is in the midst of a major overhaul of its U.S. product line, with all-new pickups, a new Cadillac CTS, two new Buick sedans, and a revamped Chevy Malibu all due to be launched just in the next few months.

GM is going to great lengths to deliver all of those products on time and without the teething troubles that have marred recent new-product launches from some of its rivals. Assuming those launches go well, we could see GM’s U.S. sales – and profits — shift into an even higher gear.

The article Silverados and Cadillacs Drive Gains for GM originally appeared on Fool.com is written by John Rosevear.

Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends BMW, Ford, and General Motors and owns shares of Ford.

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