GM Shifts into $3.25 Billion Reverse in Q1

02 May 2008

DETROIT: Auto giant General Motors posted a loss of $3.25 billion (€2.1bn; £1.6bn) in the first three months of the year – compared with a profit of $62 million in the same period of 2007.

Its stuttering performance in North America offset an improvement in Asia and Latin America.

The company's pre-tax loss in its domestic market rose to $812m (almost four times the total from the previous year), with the economic climate and rising oil prices among the factors cited as impacting sales of pickup trucks and large SUVs.

Conceding that the year ahead would be "very challenging", the company expects to reduce its output of trucks and SUVs by 138,000 in the second half.

Its overall US market share fell from 22.8% to 22.1%, while, by contrast, its revenues in Asia and Latin America saw pre-tax profits almost double to $1bn. Analysts expect these markets to be a key future target.

GM has recently cut predicted sales for the year from 16 million to "mid to high 15 million", and president Fritz Henderson has also warned: "It is a more challenging environment no doubt right now due to the rising commodity prices."

Data sourced from Wall Street Journal Online; additional content by WARC staff