General Motors should see improved revenue in 2006, driven by its new line of full-sized sport utility vehicles and trucks, chief executive Rick Wagoner reportedly said on Thursday night.
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“We are going to have a nice start to the year as we build and ship the new Chevy Tahoe, and that should help on the revenue side,” Wagoner told Reuters at GM’s ‘holiday’ party for journalists in Michigan.
Wagoner reportedly declined to say when the automaker might return to profitability, but said he was optimistic about the soon to be launched GMT-900 series – a line of redesigned SUVs with better fuel-efficiency.
The GMT-900 series, hailed by analysts as critical to the future of GM, includes Chevy Suburbans, Tahoes and GMC Yukons. Some analysts have called the line the “make-or-break” series for the automaker, Reuters noted.
The news agency said GM has lost nearly US$4 billion this year as it struggles with high labour and commodities costs, loss of US market share to foreign rivals and slumping sales of its SUVs – longtime cash generators for the auto giant.
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By GlobalDataWagoner reportedly said the recent slump in SUV sales was due, in part, to market demand, but mainly because GM had cut back on inventory to ready itself for the new models to be launched next year.
GM has also negotiated a deal with its union that would save it $1 billion in annual healthcare costs, Reuters noted.
“We worked very hard on the healthcare deal but … it will be a while before it affects the bottom line … and that is somewhat frustrating,” Wagoner told the news agency.
Speaking about the production line-up for next year, Wagoner told Reuters he expected “launch vehicles” – products that are 18 months or less old – to become a larger part of the product mix in the next two years, reflecting a higher turnover of vehicles.
The report said GM, which made its first hybrid power pickup trucks available in 2005, plans to launch its first hybrid sedan – the Saturn Vue – next year to compete with popular rivals such as the Toyota Prius and the Honda Civic Hybrid.
Wagoner reportedly said he did not know how many hybrids the automaker will make, because of the uncertainty of the size of the hybrid market. But he would like the company to have the capacity to ramp up production, he said.
“We need to get the price value equation right. We have to get the reliability right and the consumer needs to have enough time in it to see they are getting the benefit,” he told Reuters.
