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General Motors Company (GM - Analyst Report) revealed at an industry conference in Detroit that it expects modest growth in global auto sales in 2013 as improvements in China and the U.S. will be offset by sluggish car sales in Europe. The automaker predicted a 5% rise in industry sales in the U.S. and international market each, while European market is expected to shrink 4%.
The company foresees pricing pressures to exist, particularly in China and Europe. However, it expects moderate market share gain across the world driven by new vehicle launches will boost its profit margins. GM plans to upgrade 70% of its global line-ups by the end of this year and invest $8 billion annually in new vehicle development.
In North America, GM aims to boost market share and increase vehicle pricing. The company expects to enhance profit margins in the region to 10% in the next three or four years from 8% currently. Meanwhile, the company has targeted break-even results in Europe by 2015. In China, GM intends to improve margins by continuing investing in Cadillac and rolling out its OnStar communications, in-car safety system.
In late 2012, GM revealed that it intends to manufacture 500,000 vehicles per annum by 2017 that will include some form of electric technology as part of its long-term goal to become a leader in the fuel-efficient vehicles market.
The vehicles would mainly include plug-in hybrids such as Chevrolet Volt, apart from pure electric vehicles such as Chevrolet Spark EV that will go on sale this year. The company also plans to push its eAssist system technology in its new vehicles. The eAssist system boosts fuel efficiency by 25% in gasoline-powered vehicles.
Many automakers started focusing on electric powered vehicles as President Barack Obama’s administration set a goal of achieving 1 million battery-powered vehicles on the road by 2015.
In August 2012, Ford Motor Co. (F - Analyst Report) announced its plan to invest $135 million to develop key components, including advanced battery systems, for its next-generation hybrid-electric vehicles. The automaker is looking forward to double its battery-testing capabilities to 160 individual battery-test channels by 2013. It aims to boost development of hybrid-electric vehicles by at least 25%.
Ford plans to launch five fuel-efficient hybrid-electric vehicles this year including Focus Electric, C-MAX Hybrid, C-MAX Energi plug-in hybrid, new Fusion Hybrid and Fusion Energi plug-in hybrid. It also plans to triple production capacity of electrified vehicles by 2013.
GM, a Zacks Rank #3 (Hold) stock, posted a 9.7% fall in earnings to 93 cents per share (excluding special items) in the third quarter of the year from $1.03 in the corresponding quarter a year ago. However, earnings per share in the quarter far exceeded the Zacks Consensus Estimate of 61 cents.
Revenues in the quarter grew 2.5% to $37.6 billion, surpassing the Zacks Consensus Estimate of $36.3 billion. Worldwide sales volume inched up 1.6% to 2.3 million units from 2.2 million units a year ago. However, total market share declined to 11.6% from 12.1% in the third quarter of 2011.