Yesterday, RBC’s Joseph Spak worried that General Motors’ (GM) latest recall would dampen enthusiasm for the automaker’s shares. JPMorgan’s Ryan Brinkman and team look at the bright side:
Getty Images Thus far, it appears recalls have not hurt – and could even help – GM sales and market share. GM gained retail share y/y in March and was the greatest sequential gainer in April. In 1Q, GM announced recalls impacting 7 mn vehicles at a cost of $1.3 bn (or ~$186 per potential customer traffic). This compares to Thursday's recalls impacting 3 mn vehicles at a cost of $0.2 bn (or ~$67 per customer) and GM's recent marketing campaign promising $100 for test-driving a Cadillac.
Investors are having none of it today. Shares of General Motors have dropped 0.8% to $34.10 at 1:50 p.m. today, even as Ford Motor (F) has gained 0.7% to $15.80.
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