Traverse City Record-Eagle

Business

May 3, 2013

GM's first quarter profit down 14%

DETROIT (AP) — New cars were key for General Motors’ in the first quarter. New trucks will be the key to the rest of this year.

Two new Opels — the Mokka subcompact SUV and Adam small car — helped GM stanch its first-quarter losses in Europe, while the Cadillac XTS and Chevrolet Malibu sedans took China by storm. GM’s worldwide sales rose almost 4 percent in the first three months.

Now, GM’s fortunes rest on the redesigned Chevrolet Silverado and GMC Sierra full-size pickups. The trucks, which were last updated in 2007, go on sale in a few weeks. GM hopes to cut into Ford’s lead in the pickup segment, which is red-hot due to a recovery in the housing and construction markets.

“They’re long overdue,” said Bill Visnic, a senior editor and analyst with the auto shopping site Edmunds.com. “They really need these trucks to get out there and defend their share.”

GM said Thursday that its net income fell 14 percent to $865 million, partly because it slowed shipments of the old pickup models so factories could prepare to make the new ones. GM also spent more on incentives to try to clear old pickups off dealer lots.

The Silverado and Sierra remain huge sellers, even though the Dodge Ram and Ford F-Series have been retooled more recently. One of every 12 vehicles GM sold worldwide last year was a full-size pickup, and the Silverado is the second best-selling vehicle in the U.S. behind the F-Series. The big profits from GM’s trucks — estimated at up to $10,000 per vehicle — can be plowed into other products around the globe.

Kurt McNeil, GM’s U.S. sales chief, said he expects GM’s North American profits to rise in the second half of the year, when it will be able to command higher prices for the new Silverado.

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