General Motors (NYSE:GM) said this past week that it sold 9.8 million vehicles around the world in 2015, an increase of 0.2% over its 2014 result.
That doesn't sound like much of a gain. But 2014's total was a record for GM at the time, meaning last year's result was another record for the General.
And in context, it was quite a good year for GM.
Despite some business decisions that hurt sales totals, GM posted a gain
2015 was the year in which GM shut down its operations in Russia. It followed the company's decision in 2014 to stop offering a line of inexpensive Korean-made Chevrolets in Europe. And in the U.S., GM has been cutting back its sales to rental-car companies, which in the past has accounted for a significant portion of GM's North American output.
All of those business decisions, made for good reasons, cut into GM's global sales total last year. Like most of its rivals, GM also lost ground in South America, where new-vehicle sales plummeted as recessions took hold in key markets like Brazil. A slowing economy in China, where GM has a massive presence, didn't help matters either.
GM still managed to pull off a record year. A strong market in the U.S helped: Despite the planned cutbacks in rental-fleet sales, GM's overall U.S. sales rose 6% last year thanks to gains at retail. GM's U.S. retail deliveries were up 8% in 2015, thanks to a slew of much-improved new products that are finally gaining traction with American car-shoppers.
It also did better than some key rivals in China.
GM beat VW in China for the first time in several years
GM turned out to have the right products at the right time in China last year, thanks to decisions made a few years ago.
Somewhat surprisingly from an American perspective, GM was late to recognize and respond to a big increase in demand for crossover SUVs among Chinese car-buyers. It made up some lost ground in 2015, introducing the plush Buick Envision and affordable Baojun 560 crossovers. Both turned out to be big hits with Chinese buyers: GM's total SUV sales in China rose 144% in 2015.
Premium vehicles like the Envision deliver big profits. But GM has also done well at the lower end of the market. Its introduction of the affordable Baojun brand, along with the small and inexpensive (but very much up-to-date) Chevrolet New Sail subcompact sedan, has helped it take market share from arch-rival Volkswagen (NASDAQOTH:VWAGY), China's sales leader in 2013 and 2014.
The upshot: GM sold 3.61 million vehicles in China last year, up 5.2% from 2014. Contrast that with VW, which posted a 3.4% sales decline to 3.55 million vehicles sold in China in 2015.
Long story short: For GM shareholders, some good news in these numbers
Global year-over-year sales growth of just 0.2% doesn't sound very impressive. But a look under the hood shows that GM's leadership is making some strong choices, investing in profitable business lines (like SUVs in China) and cutting less-profitable products or businesses (like rental-fleet sales) that may have contributed to sales totals in the past, but didn't contribute enough to the bottom line to justify further investments.
What's more, it shows that GM CEO Mary Barra and her team have moved past Old GM's preoccupation with sales victories. Barra and her team say that they would rather beat Volkswagen and giant Toyota (NYSE:TM) in profits than in total sales. Although the General has some distance to go before it closes the profitability gap between it and its two global peers, Barra has a plan to get there -- one that doesn't need GM to be the global sales leader.
Autos are a cyclical business, and to some extent, year-over-year changes in sales are more about regional economic conditions than they are about GM's business decisions. But 2015's results show that Barra and her team are putting actions behind their talk, seeking the best returns available on their invested capital around the world.
For long-term GM shareholders, who are willing to ride out some economic ups and downs to own a well-run business that looks set to increase its profits significantly over time, that's all very nice to see.