General Motors Co’s chief financial officer said yesterday the car maker expected another very strong year and reiterated the earnings forecast for the year.
“Overall, we expect a more challenging environment across a number of dimensions,” due to rising interest rates and falling used-car prices, Chuck Stevens told investors and analysts on a conference call.
But thanks to an improving economy and lower fuel prices, Stevens said, GM believed “we’re going to be in a reasonably constructive industry environment”.
He said the No 1 US car manufacturer would 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 the year.
A combination of solid economic indicators and cost-cutting should help GM maintain profit margins of around 10%, he said.
His conference call came just days after disappointing US new light-vehicle sales figures for March showed an annualised sales rate of around 16.6 million units.
Those figures added to fears that, after a six-year boom, US vehicle sales might be set for a decline. Stevens said GM still expected US new light-vehicle sales for the industry to be around 17.5 million units, after a record 17.55 million last year.
GM believes March figures were skewed by a mild winter.
It expects full-year earnings per share of $6 to $6.50.