General Motors Co. made an official e-mailed statement, revealing that it posted its best auto sales on a monthly basis in the U.S. The company joined a number of auto manufacturers, which also reported better-than-expected sales results in the previous month, due to increased customer demand for pickups and sport-utility cars.
One of the analysts, who work with researcher AutoTrader.com – Michelle Krebs commented on the trend for Bloomberg: “We’ve had a lot of pent-up demand from the first quarter that was pretty soft because of weather conditions. There’s no question there’s a correlation between housing starts and pickup sales.”
The company, which over the last few months has been suffering from the recent vehicle recalls, also revealed that its May sales were boosted by the increased interest provoked by its redesigned Chevrolet Silverado pickups and Cadillac Escalade SUVs. The company said that its revenue over the month increased by 13% and reached 284 694 units, which topped analysts estimates of 6.4%.
The announcement comes at a moment when the consumer lending unit of the company – General Motors Financial Co. boosted the size of its offering by 200 million dollars, making it 1.4 billion dollars according to people with knowledge of the matter. According to analysts this is a sign that investors are betting on riskier securities for extra yield, as interest rates remain at very low levels.
Moreover, the size of the increase is also sign of the rising volume of auto lending in the U.S. in a moment when the countrys economy is slowly improving. As one of the investors explained, yields on parts of the deal were reduced by General Motors Financial Co. as orders were five times more than needed. The latter helped to reduce the period of the issue to just one day, while typical marketing period usually takes two or three days.
General Motors Co. was 1.15% up to close at 35.26 dollars per share yesterday, marking a one-year change of +2.44%. According to the information published on CNN Money, the 17 analysts offering 12-month price forecasts for General Motors Co. have a median target of 45.00, with a high estimate of 55.00 and a low estimate of 32.00. The median estimate represents a +27.62% increase from the last price of 35.26.
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