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General Motors Sees Brazilian Turnaround

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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


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