GM Europe President: Market Won't Return To Pre-Crisis Level Anytime Soon
January 10 2011 - 5:06PM
Dow Jones News
General Motors Co.'s (GM) European division could reach
break-even in 2011, excluding restructuring costs, if the sales
improvement seen towards the end of last year continues, but demand
for new cars in the region isn't expected to return to pre-crisis
level in the forseeable future.
GM Europe president Nick Reilly told reporters at the North
American International Auto Show the division needs a sales volume
of around 1.3 million vehicles to operate profitably in this
relatively low market.
He said sales came in just under 1.2 million vehicles last year,
which is roughly flat compared to 2009. Reilly cited a difficult
start into last year as reason for what he described as "a pretty
average" year in 2010 in terms of sales, noting that sales and
market share improved in most European countries towards the end of
last year.
In 2009, GM skipped the sale of its European Opel and Vauxhall
brands to Canadian auto parts maker Magna International Inc. (MGA,
MG.T) and decided to finance the wide-ranging turnaround program
itself. Reilly reiterated that restructuring costs last year were
around EUR1 billion, but declined to comment on the anticipated
costs to be booked this year.
GM Europe posted a $559 million loss in the third quarter last
year and $1.2 billion loss in the January-to-September period,
making it the firm's only money-losing region.
As part of GM's latest turnaround effort in Europe, Reilly plans
to lift market share, ramping up exports and broadening the product
line-up to lure new customers.
-By Christoph Rauwald, Dow Jones Newswires; +49 170 966 8093;
christoph.rauwald@dowjones.com
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