Barras GM is leaner and focused on core business after reshaping itself in 2017

Barra's GM is leaner and focused on core business after reshaping itself in 2017

General Motors has posted better than expected quarterly financial results on the back of cost cutting and higher transaction prices for GM vehicle sales in North America.

Full-year 2017 EBIT-adjusted was put at US$12.8bn, flat on last year's record performance. Results were driven by strong performance in North America, improvement in GM International led by strong equity income in China and a return to profitability in South America. GM also said that an intense focus on costs drove performance.

GM's net loss for the quarter to Dec. 31 was US$5.15bn which compares with a profit of US$1.84bn, in the same period a year earlier. However, EBIT-adjusted at US$3.1bn was a GM record for a fourth quarter.

Excluding special items such as a charge from the sale of Opel/Vauxhall, adjusted earnings per share came to $1.65, above analyst expectations.

The company noted that results had improved across all segments and that its South American business had returned to profitability in the second half of 2017.

'Sweeping change'

GM said that sweeping change accompanied its record performance in 2017 as it focused resources on  its  most  profitable  franchises and sold its  Opel/Vauxhall  and  GM  Financial  European  operations, as well as exited South and East Africa, and India.

GM said it reduced US inventories to align supply with  demand.

GM plans to introduce at least 20 new all-electric vehicles by  2023.  GM  also said it 'expects  to  deploy  self  driving  vehicles  in  a  ride sharing environment in 2019'.

In  January,  GM  forecasted  its  full-year  2018  to  be largely   in   line   with   2017's   record   performance, building  on  previous  records  in  2016  and  2015.  The introduction  of  its  all-new  full-size  pickups  later  this year is expected to help accelerate earnings in 2019, GM said.

On   a   consolidated   basis   (including   discontinued operations),   GM   reported   a   2017   net   loss   of   US$3.9bn,   driven   primarily   by   charges   totalling   US$13.5bn. These  included  a  US$7.3bn  non-cash  charge related  to  the  'remeasurement  of  deferred  tax  assets' due  to  U.S.  tax  reform,  and  a  largely  non-cash  charge of US$6.2bn resulting   from   the   sale   of   Opel/Vauxhall.

In a statement, CEO Mary Barra stressed the attention to core business: "The actions we took to further strengthen our core business and advance our vision for personal mobility made 2017 a transformative year," she said. "We will continue executing our plan and reshaping our company to position it for long-term success."

In North America GM reported record Q4 EBIT-adj. and record full-year EBIT-adj. margin of 10.7% — the third straight year above 10% — despite an 11.3% reduction in wholesale volume. Year-ending US inventory was at 63 days supply — down 90,000 units from 2016.

Through December 31, 2017, GM sold 8.9m vehicles globally, an increase of 0.8% from 2016, and grew market share in each of its three key markets.

In the United States, GM sold 3m vehicles, including record sales of crossovers and pickup trucks, helping the company earn record average transaction prices, according to J.D. Power PIN estimates.

GM and its joint ventures sold 4m vehicles in China for the first time. The record sales were anchored by Baojun and Buick, along with Cadillac, which posted a sales increase of 51%.

GM said that global deliveries of electric vehicles were a record last year at 69,500, led by record deliveries of Chevrolet Bolt EV (26,000) and Baojun E100 (11,500). 

This year, GM says it will gain the benefit of a full year of volume from the ongoing launches of its newest crossovers, the Chevrolet Traverse, Buick Enclave and GMC Terrain. The company will also introduce the next all-new Cadillac — the XT4 crossover — which will make its global debut this year.

After introducing six new or refreshed models in the fourth quarter in China, GM and its JV partners will 'launch 15 more in 2018, under the Cadillac, Buick, Chevrolet, Baojun and Wuling brands'.