TM Toyota Motor Corporation

General Motors Company (GM) has announced that it will launch its new sports utility vehicle (SUV) Chevrolet Trax at the Paris Motor Show in September 2012. The five-seated Chevrolet Trax will provide flexibility and fuel economy to the customers with superior cargo space.

The vehicle will be available in more than 140 markets, with Mexico and Canada the first to introduce it in the fourth quarter of 2012. There is, however, no immediate need to launch Chevrolet Trax in the U.S. and Canada since Chevrolet Equinox, a car similar in size, already occupies a leading position in these two markets.  

Besides Trax, Chevrolet has recently launched new Malibu mid-sized cars, Colorado mid-sized pickup trucks, TrailBlazer SUV and Cruze Station Wagon.  With its entry into the SUV segment, Trax offers Chevrolet the required flexibility, toughness and fuel economy, exhibiting the standards of expensive vehicles.

General Motors posted first-quarter 2012 adjusted earnings per share of 93 cents, down 2 cents from the year-ago quarter. The results beat the Zacks Consensus Estimate of 84 cents. The year-over-year decline in profit was attributable to lower profits from the company’s European operations.

Revenues went up 4% to $37.8 billion in the quarter, driven by a 3% rise in unit sales (to 2.3 million vehicles globally). It was higher than the Zacks Consensus Estimate of $36.4 billion.

With its record sales in fiscal 2011 and first quarter of 2012 and new product lines, the company would now concentrate more on meeting customer requirements and enhance future performance.

Detroit, Michigan-based General Motors Company is a leading global automotive company. The company along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands –Chevrolet, Buick, GMC and Cadillac. It also assembles passenger cars, crossover vehicles, light trucks, sport utility vehicles, vans and other vehicles. The company’s major competitors are Ford Motor Co. (F) and ToyotaMotor Corporation (TM).

General Motors currently retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. The company has growth opportunities from the emerging markets. Sales will also be boosted by the rising demand in the industry and diversified lineups.

However, high debt level and the Euro-zone crisis have weighed on General Motors. Taking these factors into account, we currently have a long-term (more than 6 months) Neutral recommendation on the stock.

 
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