GM sets sales record in Europe

July 10, 2008|By Bloomberg News

DETROIT - General Motors Corp. sold a record number of vehicles in Europe in this year's first half, led by a 60 percent increase in Russia, helping offset its U.S. decline.

European sales rose 2.8 percent from a year earlier to 1.16 million cars and sport utility vehicles, the automaker said in a statement yesterday. GM earlier this month reported record first-half sales in China and a 16 percent drop in the United States.

GM, the largest U.S. automaker, is trying to fend off Toyota Motor Corp. to remain the leader in annual global sales. The Detroit-based company said last week that its worldwide sales were little changed in the second quarter, after reporting in April that its first-quarter total fell less than 1 percent. Toyota beat GM by 159,000 vehicles in the first three months.

"GM is largely successful everywhere else in the world; they are just facing ugly, ugly results in the U.S.," said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tenn.. "We're so U.S.-centric we sometimes forget they are successful nearly everywhere else."

Growth overseas may buy time for Chief Executive Officer G. Richard Wagoner Jr. to end losses in the United States, where the company's market share is the lowest since 1925. GM shares fell to a 54-year low on July 2 after Merrill Lynch analyst John Murphy said a bankruptcy for the automaker is "not impossible."

Shares closed yesterday at $10.33, down 45 cents.

GM hasn't had an annual profit since 2004, and the lack of earnings required a tax-accounting change last year that led to a record $38.7 billion loss. The company hasn't had a U.S. sales gain since 1999.

The first-half gains in Europe were aided by a 24 percent increase for Chevrolet on demand for the Aveo small car and Captiva SUV. Sales in Russia climbed to 181,138 vehicles.

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