While Toyota Is Barely Edging GM in Worldwide Unit Sales, AP Report 'Forgets' Its Revenues Are Over 50% Higher
In a Monday Associated Press dispatch, reporter Tom Krisher virtually celebrated the idea that Government/General Motors "may be Number 1 again," with happy talk of "dethroning" and "overtaking" Toyota.
Nowhere did Krisher mention the inconvenient fact that Toyota's revenues dwarf GM's to the point where comparing unit sales is an absurd waste of time. Specifically:
- Toyota's sales from its automotive operations for the first six months of its fiscal year (April through September, 2010) amounted to 8,863.6 billion yen (go to the segment information in the report), which translates to roughly $104 billion at an average exchange rate of 85 yen to the dollar.
- GM's revenues during those same two quarters were $67.2 billion.
- Thus, Toyota's auto operations are over 50% larger than all of GM. We're supposed to be impressed that GM is close to selling the same number of cars? We wouldn't be if Krisher had chosen to report revenues, something any who follows business news would clearly have wanted to know.
Here are a few paragraphs of Krisher's free advertising -- er, report:
Resurgent GM nips at Toyota's heels in sales race
General Motors has a shot at being No. 1 again.
The resurgent automaker reported Monday that its worldwide sales last year came within 30,000 of beating Japanese rival Toyota, which took a big hit because of safety recalls.
GM is hiring, producing more and basking in a better reputation for quality. It expects to sell even more cars and trucks this year, putting it within reach of the title of biggest in the world - an honor it held for 76 years before losing it in 2008.
... Dana Rouse, a union official at the pickup truck factory here, called overtaking Toyota the Heisman Trophy of the auto business.
"We're going to take Toyota on, and the people in Flint are going to be a part of that," he said. "This is the birthplace of General Motors. We kind of take it a little more seriously than maybe some other towns."
... Now GM is outselling Toyota in fast-growing China, and its U.S. business is bouncing back. To overtake Toyota, it needs a sales increase of half a percentage point, about the number of Chevy Silverado pickup trucks it sells per month in the U.S.
Toyota is still wounded from recalls of more than 10 million vehicles, mainly to fix gas pedals and floor mats that could make cars speed out of control.
... Dethroning Toyota, experts say, might also help GM with marketing, even if it adds little value to the business. Their advice: GM, which has shed four of its weaker brands in recent years, should focus not on size but on making money.
... GM's global sales grew by a dramatic 12 percent last year, and it turned a $4.2 billion profit in the first nine months of the year. Financial results for the final three months of 2010 aren't in yet, but more profit is expected.
Krisher also erred in at least these items not excerpted:
- He claimed that GM took "nearly $50 billion in government help." No Tom, it's far more than that. Even if your "nearly $50 billion" in direct aid is the correct figure (I believe it's low), there's the roughly $17.5 billion it won't have to pay on its first $50 billion in profits thanks to being helped through TARP. Companies emerging from bankruptcy as new entities normally don't get that break. And that's even before considering the money shoveled into GMAC.
- He also asserts that GM "has limited rebates and low-interest financing." Even a casual TV viewer should know that the alleged limit on low-interest financing Krisher cites is a product of his imagination. GM has been aggressively promoting 0% interest for 60 months almost since it came out of bankruptcy, and more recently has been pushing no payments for the first 90 days. As to rebates, this table from Edmunds shows that GM level of rebates was higher than any other of the Big Six makers in December 2010, November 2010, and December 2009 (though by narrowing amounts in more recent months). Who do you think you're kidding, Tom?
And of course, Krisher never mentioned any of the other thuggish assistance GM has received from Uncle Sam, ranging from ripoffs of disfavored creditors in bankruptcy to far more aggressive and from all appearances orchestrated use of product recalls against its larger rival. Why let the facts get in the way of a phony story, right Tom?
Cross-posted at BizzyBlog.com.