Market Overview

General Motors Sees Brazilian Turnaround

Related GM
Exclusive: Fund Manager Zachary Savas Says Auto Is A 'Sexy Market,' Informatics Will Drive The Industry
Fast Money Halftime Report Final Trade From February 24
Geneva Auto Show: Tech, green cars, and small SUVs the talk (Seeking Alpha)
Related EWZ
Tim Seymour's Long-Term Bet On Brazil
Will Oil Trigger The Next Bear Market?
Are Mega-Trade Agreements A Threat To Brazil? (Seeking Alpha)

Auto giant General Motors (NYSE: GM) is overhauling its lineup in order to increase its market share in Brazil.

According to Reuters, GM has launched seven new vehicles in Brazil over the past 12 months, with two more due before the end of 2012.

Senior Vice President Marcos Munhoz said that, "Our sales forecasts were wrong for all of the recent launches. Each model sold more than we expected."

The company is hoping to increase its Brazilian market share from 17.4 percent last year. If it achieves that, it would be the first time it has topped that number since its peak of 23.3 percent in 2003.

It has been a busy week for General Motors, after it was revealed on Tuesday that the company is looking to resume advertising on Facebook (NASDAQ: FB).

"Daniel Akerson, the automaker's chairman and chief executive, has held talks with Facebook chief operating officer Sheryl Sandberg, as have other executives about a possible return. GM has made no decisions, and wants more evidence that paid advertising on Facebook is effective, the company confirmed," The Detroit News reported Tuesday morning.

The company may hope to generate some impressive sales figures before diving back into social network-based marketing, after the domestic auto industry as a whole saw a weak first half of the year. There are even fears that car sales could drop this year for the first time since 2003.

However, Munhoz is having none of it. He claims that the industry is shaking off the weak sales, telling Reuters, "I disagree with that forecast. I think the market has all the conditions to grow ... 1 percent to 1.5 percent this year."

GM is focusing on larger and premium segments in Brazil, as the compact-level competition is fierce (the number of brands available has increased from four to ten since 1990). Unfortunately, the company has been forced to cut roughly 2,000 jobs from two Sao Paulo factories in the last year. There have been threats of a strike from a metal workers union if GM cannot reassure its workers that there will not be further cuts.

On Thursday, General Motors traded at about $21, up roughly 1.5 percent.

Follow me @BCallwood.

Posted-In: Earnings News Retail Sales Global Markets Trading Ideas Best of Benzinga


Related Articles (EWZ + FB)

Around the Web, We're Loving...

Get Benzinga's Newsletters

Our Experts vs. S&P 500Powered by Benzinga
Marketfy Products Return S&P 500
Morning Profit Maker 42.72% 6.69%
The Option Prophet 91.14% 6.69%
SecretCaps 26.55% 6.69%
Short-Term Trend Trading 11.89% 6.69%
View the highest rated products→