GM Expects To Be More Profitable In 2013

So, General Motors isn’t very profitable — at least when compared to its most direct competitors. Luckily, the automaker has recognized this as a problem and is strategizing to fix it in the long run. Meanwhile, the short term isn’t all that glum, as The General expects to be more profitable in 2013 than it was in 2012.

Sharing its outlook with investment analysts attending the Deutsche Bank 2013 Global Auto Industry Conference in Detroit, The General has reiterated its commitment to refreshing 70 percent of its product portfolio by 2013, seeing modest industry growth — primarily driven by the U.S. and China — while Europe continues to contract. Based on these forecasts, the automaker expects to be slightly more profitable (on adjusted EBIT basis) globally in 2013, seeing improvements in each region.

“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 will continue on its global product renaissance, which started in 2012 in the U.S. — and calls for 70 percent of its product portfolio to be new or refreshed by the end of 2013, as well as in China — which started in 2011 and calls for 60 new or updated models (between GM and its partners) to hit the market through 2015.

Among key vehicles GM will launch in 2013 are:

North America

• Chevrolet Silverado
• GMC Sierra
• Chevrolet Impala
• Chevrolet Corvette Stingray
• Cadillac CTS

Europe

• Opel Adam
• Opel Cascada
• Opel Mokka
• Chevrolet Trax

South America

• Chevrolet Onix
• Chevrolet Spin

China

• Cadillac XTS
• Chevrolet Sail

To complement the aggressive product rollout, GM also took the following business steps to strengthen its balance sheet, including:

• Returning GM South America region to profitability
• Outlining plan to break even by mid-decade in Europe
• Lowering pension risk with a $29 billion obligation reduction
• Increasing financial flexibility by obtaining an $11 billion revolver
• Maintaining strong liquidity, with total liquidity of $37.5 billion (Q3, 2012)
• Increasing capital expenditures, with a total of approximately $8 billion for 2012
• Addressing ownership by U.S. Treasury overhand and returning capital
• Expanding GM Financial by acquiring Ally international operations to help close financing gap with coverage in 80 percent of markets where GM competes