General Motors (hereafter GM) has revealed that it anticipates its U.S. sales to surge 15% from 2009 to 2010. The expectation has certainly been boosted by the company’s performance in the Cash for Clunkers program. The program, launched by the U.S. Government in late July, allowed consumers to trade in their old gas-guzzling cars and trucks with a mileage of 18 miles per gallon (mpg) or less for a value of up to $3,500–$4,500.

In terms of market share, GM’s 17.6% took second place in the program after Toyota (TM) (19.4%). On the back of this overwhelming response in the program, in late August GM revealed its plan to add 60,000 vehicles to its production schedule in the third and fourth quarters and bring back about 1,350 laid-off workers.

GM has targeted to produce 535,000 cars and trucks during July–September. This implies a 35% increase in output compared to the second quarter. The company plans to raise production in the final three months of the year by another 20%.

GM will also add shifts to factories in Ingersoll, Ontario and Lordstown, Ohio. The Ingersoll plant manufactures the new Chevrolet Equinox and GMC Terrain crossover vehicles, both of which boast 32 mpg on the highway. The Lordstown plant makes the Chevrolet Cobalt small car – the company’s highest-mileage car (37 mpg) – that had been among the top 10 on the Cash for Clunkers purchase list.

Production will also be pushed up at other North American factories. This includes models such as Chevrolet HHR small wagon, the Chevrolet Colorado and GMC Canyon midsize pickups, the Chevrolet Camaro muscle car, the Buick LaCrosse sedan and the Cadillac SRX and CTS Wagon models.
Read the full analyst report on “TM”
Zacks Investment Research