New York: General Motors saw profits plunge in the second quarter after it took a hit from the cost of shuttering less profitable overseas operations, and the rest of the year looks challenging, the company said yesterday.
As car sales dipped in the cooling North American market, net income for the biggest US auto maker dropped 42 percent from the same period of 2016 to $1.7bn, while revenues fell 1.1 percent to $37 bn.
The automaker also warned that it sees a tougher business environment in the second half of the year, when it plans to suspend production at a number of US factories to make upgrades to enable production of newer pickup truck models.
Chief financial officer Chuck Stevens said the automaker viewed adjusting its production as the “first lever” in addressing a weak market, rather than resorting to consumer rebates to drive sales.
“We want to continue to improve the financial performance of those cars,” he said on a conference call. “We will be competitive but certainly wouldn’t anticipate significant price moves or incentive moves.”
Analysts praised GM for keeping profit margins high in the North America region by avoiding heavy incentives to offload cars -- something many carmakers have done in the face of the sales decline from the record 2016 levels.
