Finance Arm Props Up General Motors

22 January 2004

Auto giant General Motors has beaten its profit targets for 2003 despite ongoing problems in some of its biggest markets.

The group recorded earnings of $3.2 billion (€2.5bn; £1.7bn) before exceptional items last year, as revenues rose 4.6% to $185.5bn. Much of this growth reflects a strong performance by GM's finance arm; its auto business, however, has continued to struggle.

In the US, where GM has been fighting a long-running discount battle, profits slumped from $3.1bn to $1.2bn. Moreover, the auto giant posted losses in South America ($331m) and Europe ($286m). One bright spot, however, was Asia, where earnings tripled to $577m on strong Chinese sales.

Chief financial officer John Devine admitted that a recovery in the auto division is vital if GM is to hit its mid-decade goal of $5.7bn profits.

To this end, the auto firm is planning to revamp its passenger cars as it seeks to regain market share from Japanese manufacturers.

Data sourced from: Financial Times; additional content by WARC staff