Despite 'challenging' environment, GM CFO expects strong 2017
By Nick Carey
DETROIT (Reuters) - General Motors Co's (GM.N: Quote) chief financial officer said on Thursday the automaker expects another "very strong year" in 2017 and reiterated the company's earnings forecast for the year.
"Overall, we expect a more challenging environment across a number of dimensions" in 2017, due to rising interest rates and falling used-car prices, CFO Chuck Stevens told investors and analysts on a conference call.
But thanks to an improving economy and lower fuel prices, Stevens said GM believes "we're going to be in a reasonably constructive industry environment."
Stevens said the No. 1 U.S. automaker will reduce inventory levels, a concern for Wall Street, to around 90 days in June from 98 at the end of March, and to around 70 days by the end of 2017.
He said a combination of solid economic indicators and cost-cutting should help GM maintain profit margins of around 10 percent.
The CFO's conference call came just days after disappointing U.S. new light vehicle sales figures for March showed an annualized sales rate of around 16.6 million units.
Those figures had added to concerns that after a six-year boom cycle that U.S. auto sales might be set for a decline.
Stevens said GM still expected U.S. new light-vehicle sales for the industry at around 17.5 million units, after a record 17.55 million in 2016. Continued...