General Motors | Strong guidance for 2022 despite lower earnings

(New York) The American automaker General Motors (GM) expects “strong results” for 2022 thanks in particular to the “improvement” of the availability of semiconductors as the group pushes in electric vehicles and autonomous.

Updated yesterday at 5:04 p.m.

Juliet Michel
France Media Agency

Like the rest of the automotive sector, GM was affected throughout the year by the shortage of electronic chips, which have become essential to the manufacture of vehicles.

Although the group was unable to sell as many products as expected, it gave priority to the most popular and profitable vehicles, such as vans and SUVs.

Result: its net profit reached a record, at 10.02 billion dollars, with a turnover increasing by 4% to 127 billion dollars.

“With an improving outlook for semiconductors in the United States and China, we expect our 2022 results to remain strong,” CEO Mary Barra said in a letter to shareholders.

Inflation should not slow demand, the official also said during a conference call with analysts.

“Given the robust demand we are seeing, we believe there is scope for several million more vehicles,” she said.

The group expects its profits to remain near record highs reached in 2021, with net profit of between $9.4 billion and $10.8 billion and adjusted profit before tax of between $13 billion and $15 billion.

Affordable vehicles

The manufacturer stresses, however, that its forecast is based on the assumption of “continued and stable demand for the vehicles” and “the absence of new economic challenges or new significant supply chain problems”.

“Consumer demand for new cars continues to outstrip supply, but continued uncertainty could dampen it,” said Karl Brauer, of the specialist site iSeeCars.

“This is clearly not the best environment to push a comprehensive strategy around electric vehicles,” he added.

According to him, GM will have to find, over the next few months, the balance between the current needs of motorists, who remain overwhelmingly buyers of thermal engine cars, and the evolution of the sector over the next few years.

The venerable American carmakers GM and Ford, spurred on by Tesla’s performance on Wall Street and growing demands to limit emissions, have indeed accelerated their investments in electric and autonomous vehicles in recent months.

Mary Barra repeated on Tuesday her intention to focus on these segments, suggesting that GM could invest even more than the $35 billion already planned for this purpose.

She also stressed that the group did not immediately plan to resume the payment of dividends to shareholders, suspended at the start of the pandemic. Management wants to “keep as much flexibility as possible” to accelerate its electrification, she explained during a conference with analysts.

While Tesla recently indicated that it has shelved its plan to develop a $25,000 electric car for the time being, the official also stressed that the launch of the most affordable emission-free vehicle possible remained in its priorities and recalled on this occasion the planned launch in 2023 of an electric Chevrolet Equinox at 30,000 dollars.

The group, which sold less than 25,000 electric vehicles in 2021, has also set itself the goal of delivering 400,000 units in 2022 and 2023.

Ford is due to release its results on Thursday. According to the Bloomberg agency, the group could soon announce a major reorganization aimed at giving priority to electric vehicles, with 10 to 20 billion dollars of additional investments in the next 5 to 10 years in this segment.

After hesitating on the direction to follow just after the publication of the results, the action of GM took more than 1% in electronic trading on the New York Stock Exchange.


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