New GM pickups expected to provide an exit ramp for Obama administration

Article by Christian Andrei, on December 16, 2012

General Motors Co. has introduced its first redesigned Chevrolet Silverado full-sized pickup since 2006 – the likeliest way for the automaker to increase its share price in 2013 and urge the U.S. government to sell its stake. GM wants to directly compete with Ford Motor Co’s new trucks. GM's Silverado and GMC Sierra pickups, which are mechanically similar models that both account for up to 23% of the brand's U.S. sales in 2011, produced about 16% of GM’s worldwide earnings before interest and taxes this year.

The redesigned versions may increase this figure by over $1 billion in 2013, according to an estimate by Citigroup. Even as the truck inventories are currently big, these new models have the potential of giving a huge boost to the U.S. government as well as the other GM investors. Itay Michaeli, an analyst with Citigroup, said that the introduction of a new pickup has a tendency to “correlate very well with positive stock returns" for GM.

Since the IPO of GM in November 2010, there was already a high level of anticipation for the 2013-2014 truck launch. Analysts project that of the 13 new Chevrolet vehicles to be launched in 2013, the Silverado is expected to boost sales and profits the most.

Of the 25 analysts surveyed by Bloomberg, 19 recommend the purchase of GM stock. Rebecca Lindland, an industry analyst with IHS Automotive, said this week that the Silverado is “GM’s Super Bowl” from a volume and financial standpoint.

Topics: gm, pickup truck

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