GM sees improved profit in 2015 on China, U.S. growth

Wed Jan 14, 2015 4:52pm EST
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By Ben Klayman

DETROIT (Reuters) - General Motors Co (GM.N: Quote) on Wednesday forecast its 2015 operating profit will increase from last year due mostly to growth in its two largest auto markets, China and the United States.

As it moves past a year marred by massive recalls from a defective ignition switch linked to at least 45 deaths, GM said modest growth in global vehicle sales this year would help the largest U.S. automaker post improved results in all of its regions. It provided no specific figures.

GM also said it remained on track for 2016 targets, including 10 percent profit margins in North America and a return to profitability in Europe.

Last year, Mary Barra's first as chief executive of the Detroit company, GM dealt with the recall of 2.6 million cars due to the faulty switch that led to numerous probes and lawsuits, as well as an overall increase in total recalls from other problems.

Barra called 2014 "a pivotal year" that GM wants to build on in 2015.

GM also affirmed its plan to achieve profit margins of 9 to 10 percent by early next decade, compared with a consolidated margin of 6.4 percent in last year's third quarter, excluding the impact of recalls. GM plans to boost its capital spending plans this year by 20 percent to about $9 billion. More than one-quarter of the vehicles GM sells next year will come from new and refreshed designs, rising to almost half in 2019.

GM sees global industry sales rising about 3 percent to 89 million vehicles this year, but heightened competition will allow only moderate increases in its vehicle pricing.

GM said Wednesday its worldwide vehicle sales rose 2 percent in 2014 to 9.9 million cars and light trucks, beating the company's previous record set in 2013.   Continued...

General Motors CEO Mary Barra purses her lips before beginning her testimony before a House Energy and Commerce Oversight and Investigations Subcommittee hearing on the GM ignition switch recall on Capitol Hill in Washington June 18, 2014. REUTERS/Jonathan Ernst