Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

GM sales offset by Europe weakness

Keywords: Tags  General Motors, Dan Akerson, Chuck Stevens, quarterly earnings, North America operations, Europe operations, capacity utilization, Corinna Petry

CHICAGO — General Motors Co.’s net income fell 35.9 percent year on year in 2012 despite slightly higher revenue as the automaker recorded unfavorable special items.

Yet GM "planted seeds of growth" around the world last year and has already begun to see shoots in 2013, chairman and chief executive officer Dan Akerson said in a Feb. 14 call on the company’s earnings results.

Chinese consumers bought a record 300,000 vehicles in January, and GM has gained a full point in market share in China over the past year, he said.

Domestically, GM continued to repurchase shares from the U.S. Treasury Department and pay down its pension obligations, the company said.

GM expects to invest $8 billion on new products, research and development, and capacity expansions worldwide this year. One primary North American investment will be the launch of two redesigned full-size pickups, the Chevrolet Silverado and GMC Sierra. Existing inventory has been built up to prepare for the production changeover.

GM will have some downtime at certain assembly plants as the transition occurs, which will mean "limited upside in full-size pickup production" during 2013, Chuck Stevens, chief financial officer of GM North America and GM South America, said during the call.

The automaker posted 2012 net income of $4.86 billion vs. $7.59 billion in 2011, on revenue that grew 1.3 percent to $152.26 billion.

The company produced nearly 2.44 million vehicles worldwide during the three months ended Dec. 31, up 5 percent from 2.32 million units in the same three months of 2011. Global production in 2012 grew 2.4 percent year over year to nearly 9.49 million units.

In North America, fourth-quarter and annual output rose 4.9 percent and 4.8 percent, respectively, from 2011. Capacity utilization at North American assembly plants was 97.5 percent in 2012, up 1.9 points from 2011. That is on a two-shift basis, Stevens said; if GM operated three shifts, capacity utilization would climb to 120 to 130 percent, he said.

Europe remained a trouble spot, with fourth-quarter and full-year output at GM Europe off 16.1 percent and 22 percent, respectively, vs. the same 2011 periods, as sales fell 10.8 percent quarter on quarter and 8.2 percent year on year.

GM wrote down $5.2 billion in asset impairments in Europe last year, posting negative earnings before interest and taxes (Ebit) of $1.8 billion vs. a 2011 Ebit loss of $700 million.

Still, GM expects to break even in Europe by 2015 through strategic investments and new product sales.

Akerson reiterated earlier guidance of an industrywide U.S. seasonally adjusted annual sales rate of 15 million to 15.5 million units this year.

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends