Wednesday 05 May 2021
Despite a slight decline in sales
GM increased profits tenfold at the beginning of the year
General Motors has switched its production in view of the acute shortage of chips in the auto industry – the high sales of lucrative SUVs and pickups mean that profits in the first quarter are up sharply compared to the previous year. The calculations show less rosy prospects for the annual balance sheet.
Despite the global chip crisis, General Motors started the new year with a jump in profits. Thanks to the demand for high-margin SUVs and pickups, which the largest US automaker gave priority in view of the shortage of semiconductors in production, net income rose to $ 3 billion in the first quarter from just $ 294 million in the previous year, according to GM. Sales fell to 32.5 (previous year: 32.7) billion dollars.
The automaker continues to expect adjusted pre-tax profit at the upper end of the previously promised range of ten to eleven billion dollars in 2021. The chip crisis could cut profits this year by up to two billion dollars, affirmed GM. “The speed and agility of our team are paramount as we move from coping with a pandemic to coping with global semiconductor shortages,” wrote CEO Mary Barra in a letter to GM shareholders.
The Detroit-based company’s managing director since 2013 also announced further investments in electric vehicles and self-driving cars. The manufacturer of brands such as Cadillac, Buick, Chevrolet and GMC has had to temporarily stop production – like other car manufacturers around the world – due to the bottlenecks in chip deliveries. Several plants in the USA have been shut down since the beginning of February. In Canada, Mexico and Brazil too, production had to be throttled or completely suspended.