General Motors (NYSE: GM) stock price plummeted sharply in the past two months amid concerns over sales growth and labor strike. GM shares are currently trading slightly above from 52-weeks low of $30. The stock price is down more than 10% from 52-weeks high that it had in August.
The stock price is likely to extend the bearish trend in analysts’ view. This is because of lower U.S. deliveries in the third quarter and a huge decline in China.
Lower Q3 Deliveries Impacts General Motors Stock Price
General Motors recently reported U.S. unit sales growth of 6.3%. This is lower from the analyst’s expectations for an increase of 7.1%. Its GMC sales grew 11% from the previous year period, driven by a 51% boost in Acadia sales and 38% growth in the Sierra model. It ended the quarter with 759,633 units of inventory.
Its deliveries in China also declined by 17.5% in the third quarter to 689,531 vehicles. The decline is mostly due to the 21% drop in Buick brands and 18% drop for the Chevrolet brand. Its Baoju brand and the Wuling brand experienced a deliveries slump of 35% and 5.3%.
General Motors Seeks to Reverse the Trend
The company claims they are working on several initiatives to boost deliveries in China. They have been enhancing their concentration on midsize/large SUVs and luxury vehicles to enhance sales growth in the following quarters.
GM says, “We are in the process of introducing a record of about 20 new and refreshed models in China this year with an expanded and improved product mix.”
On the other hand, the company is seeking to end the labor strike, which already entered into the fourth week. The strike has impacted its production of 165K cars and trucks.
General Motors CEO held a meeting with UAW officials to convince them to end the strike. Overall, General Motors’ stock price is likely to remain under pressure amid lower than expected financial numbers in the third quarter. The negative impact of the strike on production could add to the bearish trend.