General Motors Co. share price down, CEO Barra sees US car market hitting 17-million mark in 2015

The Chief Executive Officer of General Motors Co. – Ms. Mary Barra – said that she expects sales of light vehicles in the US to rise 3% in 2015 as younger consumers return to the market amid stable economic conditions and lower fuel prices.

The auto sales levels that were forecast by Ms. Barra are not seen in more than a decade, deeming them a sign of the markets recovery. Sales of light vehicles, which include all vehicles except heavy trucks and buses, are expected to be in the range between 16.5 million and 17 million units, compared to 16.5 million in 2014, which was the highest in eight years. The market last time saw sales of 17 million vehicles in 2001.

“The U.S. economy and vehicle sales have been rebounding since 2009, and we believe there is still plenty of room for the auto industry to grow,” Chief Executive Officer Barra said. “I’m cautiously optimistic both about the industry and GM,” she added.

The largest US car manufacturer is now looking at younger customers, seeking to attract more of them as a driver of future growth. With the US economy steadily improving, General Motors has the opportunity to focus on its products and turn away from the vehicle recalls it faced in 2014. A troubled labor market, higher oil prices and costlier new and used cars had been keeping younger customers away from showrooms.

“The strength of the labor market, better job security and the recovery in home prices have consumers feeling pretty good about the future,” Ms. Barra said.

In addition, she shared her expectations for General Motors Europe to swing back to profit in 2016. According to her statement, the performance of the auto maker at its largest market – China – was very strong in 2014 as it managed to increase sales by 12%, compared to the markets overall growth of 7.5%.

General Motors Co. settled 1.00% higher at $36.20 per share yesterday in New York, marking a one-year change of -10.44%. The company is valued at $58.16 billion. Shares stood 0.32% lower at €30.750 in Frankfurt at 8:40 GMT on Friday. According to CNN Money, 17 analysts offering 12-month price forecasts for GM have a median target of $41.00, with a high estimate of $53.00 and a low estimate of $27.00. The median estimate represents a +13.26% increase from the previous close of $36.20.