2014 Chevrolet Silverado and GMC Sierra with GM North America president Mark Reuss
General Motors said that is predicting modest global industry growth in 2013 driven by the U.S. and China, while Europe is expected to experience further contraction. Based on this outlook and a strong cadence of new vehicle introductions, the company expects its global profitability to rise modestly in 2013 on an earnings before interest and tax (EBIT) adjusted basis, with improvements anticipated from each region.
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 U.S. and China.”
GM’s latest product overhaul strategy, which started in 2012, will see 70 per cent of the automaker’s portfolio 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 in that country through 2015.
Some of the key vehicles launching around the world include North American models such as the Chevrolet Silverado and GMC Sierra full-size pickups, the Chevrolet Impala full-size sedan, the Chevrolet Trax (sold in Canada but not the U.S.) the seventh generation Corvette (which also regains the name Stingray) and Cadillac CTS. In other markets, GM is introducing the Chevrolet Trax, the Opel Adam, Cascada and Mokka models (Europe), the Chevrolet Onix and Spin (South America) and the Cadillac XTS and Chevrolet Sail (China).
Ammann also noted that 2012 was a year in which the company improved its competitiveness, positioning it for sustained, positive growth aided by the following:
• GM South America results — returned region to profitability
• GM Europe action — outlined plan to break even by mid-decade
• Pension risk lowered — reduced by $29 billion U.S.
• Financial flexibility increased — obtained an investment grade $11 billion revolver
• Continued strong liquidity — total liquidity of $37.5 billion U.S. (Q3, 2012)
• Capital expenditures increased — total of approximately $8 billion for 2012
• Ownership by U.S. Treasury — overhang addressed and capital returned
• GM Financial expanded — acquisition of Ally international operations to help close financing gap with coverage in 80 per cent 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.”
