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Last Updated: Tuesday, 20 April, 2004, 14:52 GMT 15:52 UK
We've turned the corner, GM says
The 2004 Buick Velite four-seat convertible concept vehicle
GM's future looks stronger in the sales of financial products.
General Motors, the world's biggest car maker, has predicted higher earnings after posting better-than-expected first-quarter figures.

Shares in European car manufacturers rose on the news, with DaimlerChrysler leading the way forward.

Net earnings were $1.28bn (710m), down slightly from the $1.5bn in profits in the same period of last year.

GM's finance arm produced record results, and improvements were made in its automotive operations in Asia.

Though the overall numbers were higher than expected both GM's European and US car divisions produced weaker results after making cuts in production.

In its North American production, 7% fewer cars were manufactured to take up the slack of those unsold.

Cost of incentives

Strong competition and oversupply means that car companies need to offer more to customers to get them to part with their money often including in the already discounted price extras like CD players and leather upholstery. GM is no exception.

It spent on average $4,266 for each car sold in March in the US, up from $2,915 for the same month last year.

Global car sales have been kept buoyant in the past year partly helped by offering loans at very low rates of interest, 0% in some cases.

In a BBC interview recently GM's chief executive, Richard Wagoner, expressed concern as these deals would soon run their course.




SEE ALSO:
US carmakers losing out to Japan
06 Jan 04  |  Business
Big automakers losing US sales
01 Aug 03  |  Business


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