General Motors’ fourth-quarter profit reported on Tuesday is weaker than expected, with the carmaker blaming wider losses in Europe, lower vehicle prices plus higher costs in its core North American market.
GM’s net income in the fourth quarter rose to $892 million from $472 million a year earlier. Europe remains a cause of concern for the auto industry with several analysts citing a wider-than-expected quarterly loss by GM in that region. GM posted a profit of 48 cents per share before one-time items, 3 cents less than what analysts polled by Reuters had expected.
GM’s losses in Europe totaled $699 million in the quarter and $1.8 billion for all of 2012, more than doubling from 2011. This reflects the rapid deterioration of vehicle demand and economic conditions in the region. For GM 2012 was the 13th straight year of losses in Europe.
According to GM CFO Dan Ammann, the carmaker expects sales in Europe to further decline. Ammann says GM is „not betting on” a recovery later in the year.
In North America, GM’s most profitable region, prices fell during the fourth quarter as the company offered incentives to move its inventory of trucks on dealer lots. GM also saw a $400 million increase in costs over the previous year. It was the first drop in North American pricing for GM since the first quarter of 2011.