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Last Updated: Wednesday, 21 July, 2004, 16:01 GMT 17:01 UK
GM profits up in tough market
Opel Tigra convertible
GM throws in many free extras to sell its cars
Profits are up at General Motors for the three months to June, boosted both by car sales and finance schemes.

Incentives to buyers helped prop up falling sales against difficult conditions in the US car market.

Earnings were boosted by record results at the credit arm of the firm and better figures from car sales in Asia though less so in Europe.

But despite the positive news, GM chief executive Rick Wagoner said the results were "well below expectations".

"Despite growing market share (in Europe), we're not getting the revenue growth we had hoped for, particularly in the traditionally large western European markets," he said.

GM's global car sales rose to $529m up from $140m for the same period a year ago.

Incentives boost

In the United States, in particular, it has been the trend to offer car buyers low interest credit deals and include extras like air-conditioning and CD players at no extra cost.

GM is no exception - and in the US market offered incentives which averaged $4,215 for each vehicle sold, $500 more than in the same period a year ago.

The need for higher incentives has raised concerns that production cuts may need to be made to reduce the backlog of unsold vehicles.

Shares in GM rose 60 cents to $44.20 on the New York Stock Exchange in early trade on Wednesday.

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