US: GM expects profitability to rise 'modestly' in 2013
GM has said it expects its global profitability to rise modestly in 2013 on an earnings before interest and tax (EBIT) adjusted basis, with improvements anticipated from each world region.
The company also said it forecasts modest global industry growth in 2013 driven by the United States and China, while Europe is expected to experience further contraction.
The outlook was shared with investment analysts attending the Deutsche Bank 2013 Global Auto Industry Conference in Detroit.
"Our portfolio of new, world-class vehicles puts us on a strong footing to grow profitably," said Dan Ammann, GM senior vice president and chief financial officer. "We're launching more vehicles globally than at any time in our history and some of our most important models are targeting the two largest markets in the world - the US and China."
GM said its product renaissance, which started in 2012, will see 70% of its portfolio completely refreshed by the end of 2013. In 2011, GM and its joint venture partners in China began the rollout of more than 60 new or upgraded models that will hit the market there through 2015.
GM said that some of the key vehicles launching around the world include the Chevrolet Silverado and GMC Sierra full-size pickups, Chevrolet Impala and Corvette Stingray, and Cadillac CTS in North America; the Opel Adam, Cascada and Mokka, and Chevrolet Trax in Europe; the Chevrolet Onix and Spin in South America; and the Cadillac XTS and Chevrolet Sail in China.
Ammann noted that 2012 was a year in which the company improved its competitiveness, positioning it for sustained, positive growth.
- GM South America results - returned region to profitability
- GM Europe action - outlined plan to break even by mid-decade
- Pension risk lowered - reduced by US$29bn
- Financial flexibility increased - obtained an investment grade $11bn revolver
- Continued strong liquidity - total liquidity of $37.5bn (Q3, 2012)
- Capital expenditures increased - total of approximately $8bn for 2012
- Ownership by US Treasury - overhang addressed and capital returned
- GM Financial expanded - acquisition of Ally international operations to help close financing gap with coverage in 80% of markets where GM competes
"We've developed a fortress balance sheet, our brands are getting stronger, and we've been disciplined in running our business," Ammann said. "We're now positioned to take a 'straight-line' investment approach to vehicle development so that we can sustain profitability throughout the business cycle."