Connect with us

Hi, what are you looking for?

Business

General Motors lifts 2024 profit forecast after strong Q1

General Motors, which reported better than expected profits, is hopeful that the moderately priced Chevrolet Equinox will attract more consumers to electric vehicles
General Motors, which reported better than expected profits, is hopeful that the moderately priced Chevrolet Equinox will attract more consumers to electric vehicles - Copyright GETTY IMAGES NORTH AMERICA/AFP/File BILL PUGLIANO
General Motors, which reported better than expected profits, is hopeful that the moderately priced Chevrolet Equinox will attract more consumers to electric vehicles - Copyright GETTY IMAGES NORTH AMERICA/AFP/File BILL PUGLIANO

General Motors reported higher profits Tuesday thanks to continued strength in North America that offset a loss in its China business, enabling the carmaker to lift its forecast.

GM, which has benefited from consistently strong demand from US consumers for pickup trucks and other larger vehicles, increased its range for 2024 net income by $300 million to between $10.1 and $11.5 billion.

“The team is executing well and making progress across the board,” GM Chief Executive Mary Barra said in a letter to shareholders.

Net profits in the first quarter rose 24 percent to $3.0 billion on a 7.6 percent rise in revenues.

US auto deliveries were down slightly in terms of volume, but North American earnings climbed on “consistent” pricing and lower costs, the company said in a presentation.

“Our consumer has been remarkably resilient in this period of higher interest rates,” Chief Financial Officer Paul Jacobson said in a conference call with reporters.

Jacobson said pricing was “essentially flat” compared with the prior quarter. The company still expects pricing power to erode slightly in 2024, although it has yet to see a decline surface in the market.

Vehicle inventories at GM dealers in the United States have risen to 534,000, well above the level seen in 2023. Inventories have been lower than industry targets in recent years due to Covid-19 outages and supply chain issues.

The current inventory translates into about 63 days of supply, which GM considers “pretty good” given that spring is a seasonally strong period for car sales, Jacobson said.

GM executives confirmed plans to build between 200,000 and 300,000 electric vehicles in 2024, which will include the launch of the Chevrolet Equinox at a lower price point than other EVs.

Barra said GM was well positioned to meet consumer demand in both EVs and conventional vehicles. 

“We are very focused on making sure that we don’t overbuild and that we’re able to maintain our prices, our margins,” Barra said on a conference call with analysts. 

GM’s strength in its home market helped offset an operating loss of about $100 million in GM’s China operation.

Barra acknowledged that the competitive landscape had changed in China with the rise of more Chinese car producers.

“Over the long-term, we’re committed to China,” said Barra, who pointed to the “luxury premium” segment as an area of strength for GM in the market.

Shares of GM jumped 4.7 percent in morning trading.

AFP
Written By

With 2,400 staff representing 100 different nationalities, AFP covers the world as a leading global news agency. AFP provides fast, comprehensive and verified coverage of the issues affecting our daily lives.

You may also like:

Business

The naysayers said the maddening multicoloured cube that Erno Rubik invented 50 years ago would not survive the 1980s.

Tech & Science

The explosive growth of generative AI has sparked fears about its safety - Copyright AFP/File Stefani REYNOLDSSouth Korea and Britain kick off a major...

Business

The US Feds should keep interest rates at their current elevated levels for longer than previously expected due to disappointing inflation data.

Tech & Science

Criminals use skimming devices installed on ATMs to steal card information and PINs from unsuspecting users.