General Motors’ German arm Opel is still targeting a return to profit next year, despite continued price pressure and low-growth expectations, chief executive officer Carl-Peter Forster told a meeting of the Frankfurt International Business Journalists’ Club on Tuesday night, according to Reuters.
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“There should be a small operating profit next year,” Forster reportedly said, adding that the European motor industry won’t be able to shake off the pressure of low pricing unless the market grows.
Opel expects another year of restrained demand next year, forecasting German motor industry growth of between 0% and 5%, Reuters noted.
The news agency said Opel is in the middle of a five-year turnaround plan, which began in 2001, and, last year, posted an operating loss of €227 million after a loss of €674 million in 2001.
The German car maker recorded a profit in the first half of 2003, but increased price pressure will likely force the company back into the red in the second half, Forster said, according to Reuters, adding that he expects an operating loss for the full year.
Forster reportedly said the company has managed to increase its market share, but he acknowledged that the gains resulted from price cuts.
“We paid a very high price for this performance,” Forster said, according to Reuters, adding that Opel was coming under pressure from French and Japanese car makers who are using cost advantages to cut prices.
