Business

NEW YORK — General Motors reported higher profits on Tuesday behind another round of strong North American auto sales, with executives vowing a flexible approach to electric vehicle (EV) investment while demand growth ebbs.

The major US automaker's second-quarter results demonstrated a continued lift from robust pricing in its home market, thanks to healthy demand for trucks that has made up for weakness in China.

GM, like fellow Michigan automaker Ford, has slowed down its EV build-out, pushing back another project even as company officials emphasised a long-term commitment to the strategy.

"As we go forward, we're going to bring additional capacity online in a measured cadence," said Chief Executive Mary Barra, pointing to third-party studies showing slower EV growth in the coming period compared with the last few years.

Profits came in at $2.9 billion, up 14 per cent from the year-ago period while revenues rose 7 per cent to $48 billion.

GM increased some of its full-year projections based on the results.

North American auto sales rose compared with the year-ago period, with the company enjoying still-strong vehicle pricing that has lasted longer than analysts expected.

Barra, in a letter to shareholders, pointed to "consistently high performing portfolio of ICE [internal combustion engine] trucks and SUVs on a volume, share and margin basis".

China woes continue 

GM continued, however, to struggle in China, where competition among car companies is high and the company suffered a second consecutive quarterly loss in equity income.

Competitors are "prioritising production over profitability", said Barra, who plans to revamp a joint venture with Chinese company SAIC in hopes of a turnaround.

"When you get into the type of pricing where that's going on now, it's really a race to the bottom," Barra said.

GM noted that the company's Cruise autonomous vehicles service has returned to the road in three cities — Phoenix, Dallas and Houston — after a pause due to safety issues.

Cruise is employing a driverless taxi model in these three cities, with a safety driver present to take over if needed.

The company has not resumed service in California. Authorities halted testing of Cruise vehicles in the state in October 2023 following a series of accidents.

GM accounted for $605 million in costs in the second quarter due to a production halt on the Cruise Origin, which had been planned as a fully autonomous vehicle with no steering wheel.

Barra said the company was focusing on scaling up Cruise with a model based on the Chevrolet Bolt.

"I do think in the future, there's going to be opportunity for a vehicle like the Origin and so that remains open to us at the right time," she said.

"This was about getting costs down at Cruise and being able to scale without... uncertainty" around regulatory action.

Michigan EV project delayed 

In a letter to shareholders, Barra said the company was proceeding with a ramp-up of production of the Chevrolet Equinox EV, calling the vehicle a "game changer" because of its moderate price.

But GM Tuesday announced it is pushing back for the second time the schedule to revamp a plant in Orion, Michigan, to produce EVs.

GM now expects production to begin in 2026, a six-month delay from the prior schedule after previously pushing back the $4 billion plant upgrade by a year.

"We are adjusting our spending plans to make sure we're capital efficient and moving in lockstep with customers," Barra said.

GM shares were down 6.2 per cent in morning trading. Shares had risen nearly 39 per cent between the end of 2023 and Monday.

LONDON — Irish no-frills airline Ryanair on Monday said net profit almost halved in its first quarter as lower air fares offset a jump in demand.

Profit after tax dropped 46 per cent to 360 million euros ($392 million) in the three months to the end of June compared with 12 months earlier, Ryanair said in a results statement.

Passenger numbers increased 10 per cent to 55.5 million and average air fares dropped 15 per cent, the Dublin-based carrier added.

The airline said it was impacted also by the timing of Easter this year.

Ryanair said the lower-fares environment had continued into its second quarter.

"While second-quarter demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer," Chief Executive Michael O'Leary said in the release.

He added that full-year traffic was expected to grow 8 per cent, or as much as 200 million passengers, as long as Ryanair did not face further delay to deliveries of new Boeing planes.

BEIJING — Chinese officials pledged recently to help ease debt pressure on local governments through reforms to the tax system, after a key political gathering in the capital focused on jumpstarting the faltering economy.

All eyes were on how this week's Third Plenum of the Communist Party in Beijing, attended by President Xi Jinping, might tackle the deepening economic malaise.

But few new policies were announced as the meeting wrapped up Thursday, with officials pledging to tackle "risks" in the economy.

The world's second-largest economy is grappling with a property debt crisis, weakening consumption and an ageing population.

Adding further strain, local governments in China face a ballooning debt burden of $5.6 trillion, according to the central government, raising worries about wider economic stability.

Beijing sought to allay concerns at a Friday press conference featuring a lineup of officials.

"In response to the financial difficulties of local governments and basic organisations, it is proposed to refine the financial relationship between the central and local governments," said Han Wenxiu, an official responsible for financial and economic policy planning.

Authorities would seek to expand local sources of tax revenue and limit expenditure requirements on local governments that violated "regulations", Han said, without sharing specifics.

Fitch lowered its outlook on China's sovereign credit rating in April, citing soaring general government debt that it forecast would reach 61.3 per cent of the country's gross domestic product this year.

Han also sought to allay fears over the struggling property market, long a key driver of national growth but now grappling with spiraling debt at some of its leading firms.

He said there had been recent "positive changes in the real estate market", noting that the next step was "eliminating the disadvantages of the previous model of high debt".

Earlier this week, China posted official statistics showing the economy grew by just 4.7 per cent in the second quarter of the year.

It represented the slowest rate of expansion since early 2023, when China was emerging from a crippling zero-COVID policy that strangled growth.

Analysts polled by Bloomberg had expected 5.1 per cent.

Beijing has said it is aiming for 5 per cent growth this year — enviable for many Western countries but a far cry from the double-digit expansion that for years drove the Chinese economy.

WASHINGTON — Moody's said recently that it has upgraded Turkey's credit rating on improved governance and progress on inflation, while maintaining the country's outlook as "positive."

The shift came as Turkey battles a cost-of-living crisis that prompted President Recep Tayyip Erdogan to drop his opposition to interest rate hikes as a means of tackling inflation.

In June, the country's annual inflation rate stood at 71.6 per cent — with consumer price hikes easing after hitting a peak of 75.45 per cent in May.

Turkey's sovereign credit rating was lifted from B3 to B1, Moody's said on Friday.

This was largely due to "improvements in governance, more specifically the decisive and increasingly well-established return to orthodox monetary policy", the agency added.

"Inflation and domestic demand have started to moderate, giving us greater confidence that inflationary pressures will ease significantly over the coming months and into 2025," Moody's Ratings said.

It noted that Turkey's central bank has been boosting the credibility of monetary policy, and this has been restoring confidence in the Turkish lira.

But it warned that "political risk remains a rating constraint".

A staggering surge in consumer prices and a collapse of the Turkish lira have been deemed responsible for the severe electoral setback inflicted on Erdogan's AKP party in March's municipal elections.

For now, Moody's said the balance of risks remains "skewed to the upside".

As the effectiveness of monetary policy rises, macroeconomic stability and stronger institutions could allow the country's strengths — like its diversified and competitive economy — to come to the fore, its report added.

This is especially true if the shift in economic policies were coupled with structural changes that cut the risk of long-lasting inflation shocks, Moody's said.


BEIJING — China's leadership vowed Thursday to "resolve risks" plaguing the economy, state media said, but were yet to offer any concrete steps to pull the country out of its financial woes.


The world's second-largest economy is grappling with a property debt crisis, weakening consumption, and an ageing population.
All eyes were on how this week's Communist Party conference in Beijing, attended by President Xi Jinping, might tackle the country's deepening economic malaise.


But few new policies were announced as the meeting wrapped up Thursday, with state news agency Xinhua saying they had instead "adopted a resolution on further deepening reform".


They also agreed to "actively expand domestic demand", state media reported, after data this week showed retail sales — a key gauge of consumption — rose just two per cent in June.


They further agreed to "prevent and resolve risks in key areas such as real estate, (and) local government debt", Xinhua said.
Top officials promised to "give fuller play to the role of market mechanisms, create a fairer and more dynamic market environment".


But they also said they would "make up for market failures" and "smooth the circulation of the national economy".
China posted on Monday lower-than-expected growth, with official statistics showing the economy grew by just 4.7 per cent in the second quarter of the year.


It represented the slowest rate of expansion since early 2023, when China was emerging from a crippling zero-COVID policy that strangled growth.


Analysts polled by Bloomberg had expected 5.1 per cent.
Beijing has said it is aiming for five per cent growth this year — enviable for many Western countries but a far cry from the double-digit expansion that for years drove the Chinese economy.


But the economic uncertainty is also fuelling a vicious cycle that has kept consumption stubbornly low.


Among the most urgent issues facing the economy are the beleaguered property sector, which long served as a key engine for growth but is now mired in debt, with several top firms facing liquidation.


With the country facing those headwinds, this week's meeting resolved to "strengthen guidance of public opinion and effectively prevent and resolve ideological risks", according to state media.


Officials also formally removed ex-foreign minister Qin Gang from the ruling Communist Party's highest decision-making body, and "confirmed" the party's decision to expel former defence minister Li Shangfu.
Both officials disappeared from the public eye last year after just a few months on the job.

MOSCOW — Russian President Vladimir Putin on Wednesday warned about cryptocurrency mining in Russia, saying it risked eating up too much of the country's electricity supply and leading to regional power shortages.

Russia is one of the world's top cryptocurrency miners, in which operators of thousands of computers housed in hangers or warehouses validate transactions in return for new cryptocurrency.

But the Kremlin is sceptical of the unregulated industry and a law is currently working its way through parliament to tighten control.

Putin said on Wednesday that "almost 1.5 per cent of the total electricity consumption in the country" was being used up by cryptocurrency mining.

"And the figure continues to grow," he added during a televised meeting with government officials.

"What we need to pay attention to here, and what is alarming is that uncontrolled growth in electricity consumption for cryptocurrency mining can lead to power deficits in certain regions," he said.

Putin said three Siberian regions had already seen power shortages as a result of intense cryptocurrency mining.

"The issue is in fact acute and fraught with serious consequences," he said.

Putin did not say how Russia should address the problem, or whether he was proposing restrictions on mining activity, but said "timely decisions" needed to be taken.

Russian lawmakers will next week discuss a flagship bill on regulating cryptocurrency in the country.

The draft includes limiting large-scale mining to approved companies and allowing the government to ban mining in certain regions if the energy supply comes under pressure.

With cheap electricity and cold weather, Russia's Siberia region has long been a hotbed of cryptocurrency mining.

But Moscow is hesitant to embrace the industry, which touts itself as outside the control of central governments.

Putin also said Wednesday that the roll-out of a "digital ruble", an official digital currency backed by the country's central bank, should be accelerated.