General Motors continues to strengthen its finances and product range, but is not as profitable as it needs to be in key global markets, chairman and chief executive Rick Wagoner told shareholders on Wednesday.

According to The Associated Press (AP), a popular topic at GM’s 96th annual meeting on Wednesday was the effect of rising petrol prices on business, particularly on the sale of high-profit but fuel-slurping pickups and sport utility vehicles.

AP noted that GM has yet to see that affect buying habits after reporting on Wednesday that truck sales rose 11% in May.

“If we ask (customers), `Are you changing your vehicle of choice at this point?’ the answer is no,” Wagoner reportedly said. “It’s our hope and frankly our expectation that gas prices should be levelling off and coming back down later in the year, but we’ll have to see how that goes.”

According to AP, GM earned $US1.3 billion in the first quarter of 2004, lifted by strong results at its financing arm and improved business in growing Asian markets, but the company said automotive operations in North America and Europe continued to be hampered by intense pricing pressure, including heavy consumer incentives.

GM reportedly is hoping that a restructuring, along with new products including the Cadillac STS premium sedan, will improve the automaker’s finances but executives said there is no guarantee of a return to profitability by the end of 2004, an earlier goal.

Wagoner also said that health care costs, which represent a $5 billion annual expense, and what he called unfair trade practices are hurting GM, Associated Press said.

GM shareholders re-elected the board of directors and sided with management by voting down seven-of-seven shareholder-presented proposals which dealt with issues such as creating an outside chairman independent of the CEO and eliminating new stock options to top management, the report added.