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Despite successful year, GM may face difficult road in 2012

Sun., Jan. 29, 2012, midnight

General Motors (NYSE: GM) had a solid 2011, with domestic sales up 14 percent, well above the industry’s 10 percent and reflecting a gain in market share. That’s great for a company that some say should have died three years ago, but GM may find 2012 to be tougher, even if the economy continues to improve.

December sales showed Buick sales down 12 percent over last year and Cadillac off by 3 percent. But that’s largely due to the phase-out of the Lucerne and the DTS, respectively. Chevy numbers were better, with Cruze sales strong and Camaro sales up 20 percent. Even the Volt posted record sales.

Competition is likely to heat up considerably in 2012, though. Both Toyota and Honda faced production issues in 2011, creating an opportunity that GM seized. But after months of sales declines in the wake of production disruptions caused by last March’s tsunami in Japan, Toyota’s sales have stopped shrinking and are likely to start growing.

Competition will be spiked further by Volkswagen, which has signaled that it will look to the U.S. for growth as its European home market has stalled. Other rivals are revving their motors, too.

Meanwhile, General Motors is furiously working on major new products, but they’re not scheduled to start rolling out until 2013. (Motley Fool newsletters have recommended General Motors – and Ford.)

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