General Motors Co. credited strong customer demand and a competitive cost structure for its $3.2 billion of first-quarter profits, a 22% year-over-year increase. Revenue shot up 15% to $36.2 billion.
GM’s earnings come on the heels of solid earnings by captive General Motors Financial Co., which earned $77.2 million last quarter, up from $63.2 million in the prior-year period. GM Financial’s loan originations for the quarter climbed to $1.1 billion from $935 million in the fourth quarter of 2010, while lease originations skyrocketed to $311 million from $11 million.
Ford and Chrysler also posted first-quarter profits. Ford earned $2.6 billion for the quarter, while Chrysler earned $116 million ― its first profit since emerging from bankruptcy in 2009.
Once the real estate industry returns to “normal underwriting”, this comparison of relative default rates will not be valid. However, since we know how dumb Congress is on such matters (most agree that it was Congress that played a major role when they “authorized” the mortgage mess), I suspect they will eagerly swallow the data in exchange for support from lobbiest.
Additionally, the prices of used cars are temporarily high in this same period which helps lower losses.
People cannot afford $30000 pickup trucks when they are unemployed and underemployed. Look at the sales volume jumps of the lowest price new car brands which may be cheaper to buy than a traditional used vehicle.
Finally, did the Grant Thorton study include the sub-prime car market as part of the asset class analysis? If things are so “rosey” why did it collapse?