Super Bowl XLV was a huge hit with fans, garnering its best ratings in years. Despite the Green Bay Packers winning the game, the real victors might have been the advertisers. This year, one of those with a presence was formerly embattled auto giant General Motors (NYSE:GM).
The company’s return to Super Bowl advertising came with a flurry of ads featuring its Chevrolet brand. Perhaps the most entertaining of the spots featured a Camaro morphing into a character from the Transformers movies. The ad ends with the brand’s latest message: “Chevy Runs Deep.”
This is a bold statement from a company who just a few years ago required a massive taxpayer bailout to the tune of $50 billion just to avoid bankruptcy. But that was then, and this is now. And nearly three months after the company’s IPO hit trading floors, GM’s stock has shifted into high gear.
GM shares began trading again on Nov. 19, opening at $33. The stock drove to nearly $39 by early January, but since then has fallen back down to about $37. That’s an increase of over 12% in the stock since it became public again, and that makes GM shares a very big winner. To be certain, GM shares are off to a fast start, but given the latest batch of good news there definitely could be more gas in the tank for this auto stock.
Foremost among that good news is the significant rise in U.S. light vehicle sales in January by all automakers. That metric jumped by 17% to a seasonally adjusted annual rate of 12.6 million vehicles in January — the highest monthly level since the cash-for-clunkers program during the summer of 2009.
Sales at GM were up 23% in January to 178,896 vehicles, driven by a big surge in sales of its crossover vehicles and pickup trucks. GM’s retail sales saw a 36% improvement over the same period a year ago. By comparison, rival U.S. automaker Ford
(NYSE:F) saw January light vehicle sales rise just 9.2% to 116,534 vehicles.
Those strong rising U.S. sales figures are good, but the company isn’t resting on its domestic laurels. GM is betting big on sales from the rest of the globe. The company recently added two new global executive spots to its management team as part of its ongoing push to conquer international auto markets. Those markets are going to be huge in the years to come, as growing populations and growing wealth in the developing world will undoubtedly lead to millions of new customers for all automakers. GM wants a piece of that global auto pie, and it’s taken the steps necessary to do so.
GM already is huge in China, the world’s biggest international market with 18 million vehicles sold in 2010. GM was among the first automakers to venture into China back in the late 1990s, and that early decision has paid off. GM’s global sales in 2010 were up 12% over the previous year on strong sales in China and South America. That increase in sales pushed GM close to recapturing the top spot as the world’s largest-selling automaker behind only Toyota (NYSE:TM).
Next week, we’ll find out just how well GM did during the fourth quarter, as the company is due to release earnings on Feb. 17. If those numbers come in strong, GM shares could very well continue on their bullish ride.
At the time of publication., Jim Woods did not own a position in any of the stocks or funds named here.
