General Motors reported higher profits on Tuesday (Jul 23) behind another round of strong North American auto sales that compensated for continued weakness in China.
The big US automaker’s second-quarter results demonstrated a continued lift from robust pricing in its home market, thanks to truck and sport utility vehicles that have benefited from persistently healthy demand.
Pricing “held up pretty consistently longer than many of the analysts have projected,” said chief financial officer Paul Jacobson.
Profits came in at US$2.9 billion, up 14 per cent from the year-ago period, while revenues rose seven per cent to US$48 billion.
GM increased some of its full-year projections based on the results.
North American auto deliveries rose compared with the year-ago period, but GM continued to struggle in China, where competition among car companies is severe.
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GM reported a second consecutive quarterly loss in equity income in its China joint venture.
Jacobson said efforts to revamp its China venture “have not been enough.”
GM is working with its joint venture partner “to restructure the business to make it profitable and sustainable,” he said.
In a letter to shareholders, GM chief executive Mary Barra said the company was proceeding with a ramp-up of production of the Chevrolet Equinox EV, calling the vehicle a “game changer” because of its moderate price.
Barra pointed to other upcoming EV models, although the company has pushed back some capital investments in light of slower than expected EV sales growth.
GM’s approach will be “guided by the customer,” Jacobson told reporters.
Barra noted that the company’s Cruise autonomous vehicles has returned to the road in three cities after a pause due to safety issues.
GM accounted for US$605 million in costs in the second quarter due to a production halt on the Cruise, Jacobson said. AFP
