General Motors Co., expects its total earnings before interest and tax (EBIT) adjusted and EBIT-adjusted margin to increase in 2015, compared to 2014, after adjusting 2014 for the impact of recall costs. The company also anticipates improved automotive results in all regions.
This outlook is based on modest global industry growth expected in 2015, which will result primarily from continued growth in China, Europe and the United States, and ongoing launches of key vehicles.
CEO Mary Barra, President Dan Ammann, and Executive Vice President and Chief Financial Officer Chuck Stevens shared this outlook with investor analysts attending the Deutsche Bank 2015 Global Auto Industry Conference in Detroit.
- Expects higher EBIT-adjusted and EBIT-adjusted margins in 2015
- Reaffirms previously announced 2016 targets and plan to achieve 9- to 10-percent margin by early next decade
GM reiterated it is on track to meet its previously announced 2016 financial targets to achieve EBIT-adjusted margins in North America of 10 percent; to return to profitability in Europe, and to maintain strong margins in China.
The company also said its plan puts it on the path to achieve 9- to 10-percent margins by early next decade. The strategic plan, shared during the Global Business Conference in October 2014, includes several major initiatives: lead in product and technology; grow the Chevrolet and Cadillac brands globally; continue growing in China; continue growing GM Financial, and deliver core operating efficiencies.
“We had a pivotal year in 2014, outlining a customer-focused strategic plan for the company and delivering on our commitments by achieving strong core operating performance,” Barra said. “We’ll build on this momentum in 2015 and continue executing our plan to become the most-valued automotive company.”
Among key accomplishments for 2014, Barra noted the following:
- Earned the most J.D. Power Initial Quality Study awards for second consecutive year in the United States.
- Launched more models in North America with 4G LTE mobile broadband than all other automakers combined.
- GM and its joint ventures sold a record 3.5 million vehicles in China, up
12.0 percent from 2013.
- Opel/Vauxhall market share in Europe grew for the second year in a row, including increases in 12 European markets.
- Achieved five straight quarters of EBIT-adjusted margin growth in North America through the third quarter of 2014 (excluding recalls).
- Standard & Poor’s upgraded GM and GM Financial to investment grade.
- Returned $2.0 billion to common stock shareholders through dividends.
To support its future growth, GM plans to increase capital expenditures to approximately $9 billion in 2015, reflecting increased investments in products and technologies.
“Overall, 2014 was a very solid year in which we met expectations on core operating performance, despite a number of significant headwinds,” Stevens said.
“Importantly, improvements in 2015 will keep us firmly on track to meet our near-term objectives and demonstrate solid progress toward our targeted margins of 9 to 10 percent by early next decade.”
GM Delivers its Second Consecutive Year of Record Global Sales:
General Motors Co., is reporting its second consecutive year of record global sales. In 2014, the company and its dealers delivered 9,924,880 vehicles around the world, surpassing by 2 percent the record set in 2013.
“GM is making solid progress and has good momentum. Our customer focus, the new cars, trucks and crossovers we launched in China and North America, technologies like OnStar with 4GLTE and the revitalization underway at Opel helped us achieve another record year, despite very challenging market conditions in different parts of the world,” said GM CEO Mary Barra.
- Record China sales and market share
- Global Cadillac sales up 5 percent
- Record global Buick sales
- Opel/Vauxhall sales outpace European industry
Among GM’s major launches are the new Opel Corsa, which arrives in European showrooms later this month and the Chevrolet Trax small crossover in the United States, which began arriving in showrooms in December 2014. In addition, GM is increasing U.S. production of the Chevrolet Colorado and GMC Canyon mid-size pickups, which launched late last year. Launches in China include three Chevrolets, two Buicks and two Cadillacs. OnStar is also expanding into Europe and launching 4GLTE service in China.
Deliveries in North America rose 6 percent in 2014 to 3,412,714 units and the company’s estimated market share of 16.9 percent was equal to 2013.
The redesigned full-size pickups and large SUVs introduced by Chevrolet and GMC starting in the second half of 2013, along with the Cadillac Escalade, were major contributors to the company’s success in North America. Dealers delivered almost 1 million units in the United States alone, up 11 percent year over year, which helped drive average transaction prices to a full-year record of nearly $33,900, up about $2,600 from 2013, according to J.D. Power PIN estimates.
Deliveries in China rose 12 percent to a record 3,539,972 and the company’s estimated market share increased 0.6 percentage points to 14.8 percent. Chevrolet, Cadillac, Buick, Wuling and Baojun all set annual sales records.
GM and its joint ventures expanded their lineup with several new and refreshed models in China, including the Buick Envision premium midsize SUV, Chevrolet Trax and Sail 3 family car, Cadillac ATS-L luxury sport sedan and Baojun 730 family vehicle.
Global Sales Highlights (vs. 2013)
- Chevrolet sales in China were up 10 percent to a record 717,007 units, sales in the United States were up 4 percent to more than 2 million units and the brand was the market leader in South America. Global sales were down 4 percent, reflecting Chevrolet’s repositioning in Europe and weak industry conditions in a number of the brand’s major markets.
- Cadillac increased its sales 5 percent on the strength of a 47 percent increase in China, where sales reached a record 73,500 units.
- Buick delivered nearly 1.2 million vehicles, with sales in North America and China both up 13 percent. In the United States, the Buick Encore has become the industry’s best-selling small crossover. On a global basis, the Encore ended 2014 with sales of 138,218 units, up 42 percent.
- Opel/Vauxhall delivered almost 1.1 million vehicles in Europe in 2014, and had its highest sales and market share since 2011. Sales in the region were up 3.4 percent, which nearly doubled the industry’s 1.8 percent increase. Sales were up in 16 European countries.
- In the United States, Chevrolet and GMC increased their combined share of the retail market for large pickups by a full percentage point to 38.9 percent. The brands’ retail share in the large SUV segment was up 7.8 points to 74.7 percent.