General Motor vs. Ford: Everybody Wins?

Citigroup’s Itay Michaeli and team believe Ford Motor (F) and General Motors (GM) aren’t necessarily involved in a “zero-sum game.” They explain why:

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Full-size pickup truck sales outperformed the industry again (+6% vs. +4%) with healthy pricing. Importantly, GM's share rebounded ~300bp MoM to ~35%—even, as we believe, transaction prices held most of last month's exceptional gains. Did Ford have a bad month? No, Ford reported strong truck pricing gains even as share eased. Did Chrysler have a bad month? No, segment share seemed to hold recent gains. So what's going on? In the recent sell-side debates about GM's and Ford's respective truck stories, what's often been missed, in our view, is the demand side of the equation. Is anyone asking why pickup truck prices have risen more than $4k since 2011 with sales concurrently outperforming? Or why used pickup prices are similarly as strong? What we're witnessing, in our view, is the release of grossly overlooked pent-up demand—and this isn't about housing…As pent-up demand continues to come alive (and GM's pickup population share = ~41%), we're seeing it come through both in sales and pricing, leading to months like April where everyone "wins". And we think this can continue. It's not a zero sum game.

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Shares of General Motors have ticked up 0.1% to $34.94, while Ford Motor has dropped 0.3% to $15.87.