General Motors Company (GM - Free Report) announced that it will start manufacturing its first plug-in hybrid version of Cadillac, ELR, in the later half of 2013. The company will assemble the vehicle at the Detroit-Hamtramck Assembly plant that also produces another hybrid, Chevrolet Volt and its European version Opel/Vauxhall Ampera, and Australia/New Zealand version, Holden Volt.
Cadillac ELR will be equipped with four-cylinder gasoline engine generating power once the batteries are exhausted. It is a production version of Cadillac Converj concept car, unveiled at the Detroit auto show in 2009. The introduction of ELR is believed to be GM’s step toward its commitment of delivering electric vehicles with advanced technology.
However, GM did not provide any update on the mileage of Cadillac ELR, which will operate much like the Volt. The 2013 Volt travels 38 miles on full charge and has a full driving range of 380 miles. It delivers 98 miles-per-gallon.
Recently, GM suspended production of Volt for 4 weeks possibly due to weak sales of the vehicle. However, GM refuted the argument, stating that the temporary shutdown was caused by retooling for the production of newly designed 2014 Chevrolet Impala at the plant in early 2013.
General Motors will invest $35 million for the production of Cadillac ELR, bringing the total investment at the plant to $561 million since December 2009. The company expects sales of Cadillac to increase two fold from 147,000 vehicles in 2010 in the U.S. Together with 10 new models including Cadillac ELR, the company expects to occupy top position in the U.S. luxury auto market.
In the second quarter of 2012, General Motors registered a 41% decline in profits to $1.49 billion or 90 cents per share from $2.52 billion or $1.54 in the corresponding quarter of 2011. However, reported earnings per share exceeded the Zacks Consensus Estimate by 15 cents.
Total revenue fell 4.5% year over year to $37.60 billion in the quarter, missing the Zacks Consensus Estimate of $37.98 billion. The decline in profits and revenues was attributable to strengthening of U.S. dollar against most of the major currencies as well as weak macroeconomic conditions globally, especially in Europe and South America.
Detroit, Michigan-based General Motors is the largest automobile manufacturer in the world and one of the ‘Big Three’ U.S. automakers. However, like its competitor Ford Motor Co. (F - Free Report) , the company's significant exposure to troubled Europe has adversely affected its operations.
Currently, General Motors retains a Zacks #3 Rank, which translates into a short-term Hold rating and we have a long-term Neutral recommendation on the stock.