DETROIT General Motors sees increase in profits, market share in '04
GM aims for large jump in profits in the next couple of years.
DETROIT (AP) -- General Motors Corp., the world's largest automaker, said Thursday it expects to improve profitability and increase market share in all global regions this year, aided by what it predicts to be record industry sales worldwide.
In a presentation to Wall Street analysts, GM said it expects to earn $6 to $6.50 a share in 2004, excluding special items. The current estimate of analysts surveyed by Thomson First Call is $5.79 a share. The automaker also reiterated its goal of achieving earnings of $10 a share in the next couple of years.
GM said the current Wall Street forecast of $1.22-a-share earnings for the fourth quarter of 2003 is a "reasonable estimate." The automaker reports fourth-quarter and year-end earnings Jan. 20.
GM chairman Rick Wagoner touted several achievements for the company in 2003, such as fully funding its U.S. hourly and salaried pension plans, which began the year with a $19.3 billion deficit, and posting record results at its finance arm. The finance business, helped by the nation's refinancing boom, was a major contributor to GM profits last year.
Wagoner cited the company's ability to leverage global resources to meet local market needs as an important competitive advantage.
"The winners in tomorrow's global auto industry will be those companies that best combine the efficiencies of global scale with a superb focus on local markets," he said. "I like GM's position."
GM is coming off a year in which its U.S. market share fell to 28 percent from 28.4 percent in 2004. The company had posted two consecutive years of market share gains. Its U.S. sales were off 2.4 percent last year.
Ford Motor Co. and DaimlerChrysler AG's Chrysler Group also lost share in 2003, while Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. -- the top three foreign brands in the United States -- all expanded theirs.
Analysts say a wave of new vehicles from the Big Three in 2004 is likely to stem their market share declines, though gaining ground is expected to be difficult. Wagoner declined to say how much above 28 percent GM expected to grow its U.S. share this year.
He also reiterated his hope that the improving economy and a beefed-up portfolio will allow for an abatement of consumer incentives in 2004, but he said GM will remain aggressive in pursuing sales.
In fact, the automaker announced Thursday an enhanced incentive program that adds sport utility vehicles and pickup trucks to vehicles eligible for interest-free loans for up to five years.
GM expects record global industry sales of about 60 million vehicles in 2004, up more than 3 percent over 2003. The growth is expected to be led by strength in China and other emerging markets, with a gradual recovery in South America and continued improvement in the United States.
GM estimates industry sales will be up roughly 2 percent next year in the United States.