That's hardly news. Between decades of not-quite-good-enough products and squandered business opportunities on one hand, and the politically fueled scorn over GM's taxpayer-funded bailout on the other, lots of car buyers (and investors) have been more than happy to overlook the General.
If you look more closely, though, you'll see something interesting: In many important ways, GM really is changing. Here's a company with strong profits, money in the bank, and a sharp management team led by CEO Dan Akerson that is methodically attacking its remaining chronic ills. As it rolls out a slew of new products over the next couple of years, things could get very good indeed for the General.
But there are still plenty of challenges between here and there, and the second half of 2012 is likely to see developments on several key fronts.
Product overhaul gathering steam
The biggest issue for GM -- around the world, really -- is its hit-or-miss product lineup. While some of GM's vehicles are excellent and very competitive, others have fallen behind, with replacements long overdue. The problem for GM is that many of its product-development programs were halted or delayed during the company's death spiral and bankruptcy, while competitors like Ford
Ford's global product overhaul is nearly complete, and the Blue Oval's showrooms are full of hit products like the Focus, the Explorer, and the just-launched Escape. While GM has some great products, like the compact Chevy Cruze, its own product revamp is still a couple of years behind Ford's, and its market share has suffered accordingly: Sales were up just 4% in the first half of 2012, and its market share was just 18.1%, down significantly from roughly 20% a year ago.
That could start changing, though. Due in the second half of 2012: Two all-new Cadillac sedans (one of which, the XTS, began arriving at dealers in June), the Chevy Spark minicar, the redesigned Chevy Malibu sedan, new Buicks, and refreshed versions of GM's popular big "crossover" SUVs, the Buick Enclave, Chevy Traverse and GMC Acadia.
Those will be followed early next year with more new products, including the (long overdue) Chevy Impala full-size sedan and replacements for some of GM's most important products, its full-size pickups and SUVs like the Chevy Tahoe and Suburban.
But meanwhile, GM's sales efforts in the all-important U.S. market -- and elsewhere -- face big challenges.
But expensive challenges remain
GM's per-vehicle spending on incentives was probably down a bit in June over high May levels, according to estimates from TrueCar.com and Edmunds, but it's still among the highest in the industry, far ahead of other relatively big spenders like Nissan (OTC: NSANY) and Ford, and nearly double what Toyota
To some extent, that's a result of GM's relatively weak product line. GM's spending on incentives for its best cars, like the Cruze, is actually at the low end of the scale -- proof that the General can build a good product and compete head-to-head with anyone. But until its showrooms are filled with products as competitive as the Cruze, GM's incentives spending will likely be high -- and that will hurt margins.
Meanwhile, overseas operations will be a mixed bag. While GM's sales in China were up 10.1% in June, a slowing economy -- and restrictions on new-car sales in several major Chinese cities -- could crimp growth and profits in the Middle Kingdom for the next few quarters. And I expect no dramatic fixes to GM's long-suffering European operation anytime soon, meaning that it will almost certainly continue to post significant losses through 2012 and beyond – though a long-term fix is in the works.
The upshot: There's still reason to be wary
GM has come a long way even since it exited bankruptcy in 2009. To some extent, GM's turnaround has been in the shadow of Ford's, and political dramas like last year's Chevy Volt kerfuffle haven't helped. But as more new products hit GM's showrooms, public perceptions -- and GM's fortunes -- should improve.
For GM, relentless execution on its impressive product plan is a must going forward. All of its upcoming new-vehicle launches are critical, and any missteps will play into negative preconceptions and hurt GM's prospects with customers and investors alike. Can the New Improved General Motors follow in Ford's turnaround footsteps? The remainder of 2012 will be telling.
GM's stock, currently mired in the low $20s, could have significant upside in coming months as those new products hit showrooms and Akerson's improvements continue. But we've run across another stock pick that has so much promise we've dubbed it "The Motley Fool's Top Stock for 2012." This company is revolutionizing commerce in Latin America and could be a golden opportunity for savvy investors. You can get instant access to the name of this company and the full story -- download it now.