General Motors expects the following years to bring a 10% raise in profit margin, up from the actual 6% margin.
If the company manages to achieve this 10% goal, it will mean a $15 billion profit, and $10 billion record net income, compared to 2011, when the revenue was estimated at about $150 billion. On February 16th the company is expected to report $8 billion net income for the last year, brought by the growth in China and solid profits from North America.
2011 was the year when GM got back in business, after the 2009 downfall, when it had to close 14 factories, 2,400 dealerships and eliminate 29,000 jobs, canceling about $80 billion in debt. But cost cuts and capital infusion couldn’t keep a company alive for a long time, so GM realized that another strategy was necessary. They began to refocus on the production of sedans and crossover-utility vehicles (CUVs). Unfortunately other companies are using the same strategy, so it will be difficult for GM’s models to capture attention.
Furthermore, GM also began to reduce the truck production, closing several factories, and focus on redesigned smaller cars such as the Cruze, Aveo and Malibu. Hopefully, this will bring GM the 10% they envision for the next years.