Sunday, December 31, 2006

GM-Europe projects higher profits on models for '07

Wednesday, December 06, 2006
GM-Europe projects higher profits on models for '07
Rising sales in Russia, expected to increase about 60,000 units, should help automaker.
Christoph Rauwald / Dow Jones Newswires

BOLOGNA, Italy -- The head of General Motors Corp.'s European division said Tuesday that the group is aiming for higher profits in 2007, boosted in part by rising sales in Russia and demand for its revamped Opel Corsa model.

"We want to earn more in 2007 and the new Corsa should help us to do so," Carl-Peter Forster told reporters at the Bologna Motor Show.

He said that sales in Russia -- a market that many European automakers, including DaimlerChrysler AG and Volkswagen AG, among others, are targeting -- are expected to increase to about 180,000 next year, up from the approximate 120,000 sold so far this year.

As for the rest of Europe, he said the western European auto market was likely to show "only little growth" in 2007.

Previously, Zurich, Switzerland-GM Europe has said that overall European vehicle sales are likely to hold steady at around 1.6 million this year.

The company is set to turn a profit, after six years of losses, with earnings of $196 million in the first nine months of 2006 compared to a $183 million loss a year ago. The increase is the result of lower costs and higher revenue per car.

GM revamps hatchback

Detroit-based GM lost $10.6 billion last year, but its losses are narrowing as it benefits from cost cuts and new products.

The company lost $115 million in the third quarter of this year.

The company is unveiling a revamped version of its Opel Hastra hatchback at the auto show, which boasts some design tweaks and updated powertrains.

The car is set to go on sale across Europe in February.

Speaking to reporters at the Motor Show, Forster said that key Asian currencies like the Japanese yen are currently significantly undervalued compared to the euro, which is beneficial for Asian auto exports to Europe.

Forster said he thinks that there are "also political motifs behind this," adding that some currencies "are kept artificially low."

As a result, Forster sees no need to reduce or even give up the current European import duties.

"We shouldn't let ourselves be lead around by the nose," Forster said.

© Copyright 2006 The Detroit News. All rights reserved.


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