The No. 1 US automaker managed to post a positive result this quarter, with net income growing to $1.38 billion. But the result, aided by the strong pricing strategy in North America and record China sales also hides perpetual issues.
When it comes to earnings before interest and taxes – and excluding one-off charges – the situation actually worsened compared to last year, as the tally fell 14% to $2.26 billion as continued weaknesses in South America and other international regions affected profit.
The GM strategy is deeply challenged in Europe for example, where the regional unit’s loss was far wider than a year ago for the same period: $387 million versus a $238 million loss. Naturally, the steep fall in Russian sales weighed on the results. According to Chief Financial Officer Chuck Stevens, without talking about Russia or the division’s restructuring expenses, the European business “is actually improving” thanks to updated cost control procedures and higher sales from new model introductions at the Opel and Vauxhall brands.
When it comes to GM’s neighboring region, South America has become another weak spot for the automaker – posting a $32 million loss (third-quarter profit of $284 million in 2013). Also, even as China brought in 14% more money – $484 million – the GM international operations only managed to bring home $259 million, a drop of 20% from a year ago.
Via Automotive News Europe