General Motors lifts 2024 profit forecast after strong Q1

NEW YORK — General Motors (GM) reported higher profits Tuesday thanks to continued strength in North America that offset a loss in its China business, enabling the car maker to lift its forecast.

GM, which has benefited from consistently strong demand from US consumers for pickup trucks and other larger vehicles, increased its range for 2024 net income by $300 million to between $10.1 and $11.5 billion.

"The team is executing well and making progress across the board," GM Chief Executive Mary Barra said in a letter to shareholders.

Net profits in the first quarter rose 24 per cent to $3 billion on a 7.6 per cent rise in revenues.

US auto deliveries were down slightly in terms of volume, but North American earnings climbed on "consistent" pricing and lower costs, the company said in a presentation.

"Our consumer has been remarkably resilient in this period of higher interest rates," Chief Financial Officer Paul Jacobson said in a conference call with reporters.

Jacobson said pricing was "essentially flat" compared with the prior quarter. The company still expects pricing power to erode slightly in 2024, although it has yet to see a decline surface in the market.

Vehicle inventories at GM dealers in the United States have risen to 534,000, well above the level seen in 2023. Inventories have been lower than industry targets in recent years due to COVID-19 outages and supply chain issues.

The current inventory translates into about 63 days of supply, which GM considers "pretty good" given that spring is a seasonally strong period for car sales, Jacobson said.

GM's strength in its home market helped offset an operating loss of about $100 million in GM's China operation.

"We expect things to normalise a little bit and turn back to profit," Jacobson said of China, pointing to upcoming vehicle launches.