General Motors Co. (GM) revealed that it expects to sell 1.5 million vehicles per year in South America by 2015, up from 1.03 million in 2010. The guidance includes sales of 700,000 vehicles in Brazil this year, up from 657,000 last year. In Chile itself, the company intends to sell 50,000 vehicles this year, up from 47,000 in the previous year.
GM plans to introduce 40 new vehicles in South America through 2012. However, the company does not have any plans to open new car manufacturing plants in the continent, except a small engine manufacturing facility in southern Brazil next year.
Last year, GM added South America as another reportable business area. Previously, GM’s reportable units comprised North America, Europe and International Operations.
The unit, based in Sao Paulo, Brazil, manages sales and manufacturing operations in Brazil, Argentina, Colombia, Ecuador, Venezuela, Bolivia, Chile, Paraguay, Peru and Uruguay. It is the company's third-largest market after China and the U.S.
The company has appointed 55-year-old Jaime Ardila as the president of the new unit. Jaime Ardila had been in charge of the company’s Mercosur operations, which is composed of four sovereign member states – Argentina, Brazil, Paraguay and Uruguay.
GM’s growing interest in its South American business has long been noticed by its increasing focus on Brazil. The automaker is pursuing a plan to increase production capacity and renovate its Chevrolet models in Brazil. The plan entails a total investment of R$5 billion ($2.8 billion) and would run until 2012.
GM, a Zacks #3 Rank (Hold) stock, earned a profit of $3.2 billion or $1.77 per share in the first quarter of 2011 that increased more than threefold from $865 million or 55 cents per share a year ago. However, more than half of the profits have been made by one-time gain from sales of the company’s ownership interest in Delphi Automotive LLP ($1.6 billion) and Ally Financial Inc. ($300 million).
Excluding these gains and a $0.4 billion goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges of $0.1 billion at GM International Operations (GMIO) related to revised tax regulations affecting the company’s India joint venture, GM’s profit stood at $1.7 billion or 95 cents per share, topping the Zacks Consensus Estimate by a penny. It was also GM's biggest profit in 11 years since earning $1.8 billion in the second quarter of 2000.
Revenues during the quarter went up 15% to $36.2 billion on sales of 2.2 million vehicles globally, up 11% from the prior year. It exceeded the Zacks Consensus Estimate of $35.2 billion.
Strong demand for its fuel-efficient lineups including Chevrolet Cruze compact and Equinox crossover helped boost the company’s sales. The automaker occupied a market share of 11.5% during the quarter, up from 11.1% in the year-ago quarter.
However, GM is still lagging behind its hometown rival, Ford Motor Co. (F), in spite of selling more vehicle units. Ford posted a 48% rise in profit to $2.61 billion in the first quarter of 2011 from $1.76 billion in the same quarter of 2010. On earnings per share basis, profits rose 35% to 62 cents from 46 cents a year ago, thereby topping the Zacks Consensus Estimate by 12 cents.
The company’s revenues escalated 18% to $33.1 billion, surpassing the Zacks Consensus Estimate of $30.5 billion. The increase in revenues was backed by a 12% rise in sales to 1.40 million vehicles.
FORD MOTOR CO (F): Free Stock Analysis Report
Be the first to comment