In the last two years, revenues from the business’s financial services arm increased 98.2% or nearly doubled. In 3Q14, General Motors Financial’s earnings accounted for 3.2% of General Motors’ overall earnings. In 3Q16, it represented 5.8%. The positive trend is clearly visible in the above chart.
What’s driving the growth?
It’s important is necessary to note that the majority of retail lorry clients choose to utilize car funding services when acquiring lorries. General Motors Financial’s rising earnings reflect optimism in General Motors’ overall sales pattern. As the business continues to cut its fleet sales and improve its retail lorry sales, investors can most likely anticipate the favorable trend in General Motors Financial’s revenues to continue.
Greater retail automobile sales that drive these incomes must also lead to more growth in General Motors’ success. General Motors Financial’s incomes suggest General Motors’ general performance.
Currently, the business’s financing arm supplies its services mainly in North America, Europe, China, and South America. At the end of 2015, General Motors Financial had 50 centers globally– 22 are located in the United States. Other significant centers outside the United States consist of those in Brazil, Canada, China, Germany, Mexico, and the UK.
Mainstream automakers (XLY) such as Toyota (TM), Ford (F), and Volkswagen (VLKAY) likewise provide funding centers to their clients with their own financial services arms.
In the next part, we’ll go over other essential highlights of General Motors’ 3Q16 earnings.