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GM raises 2023 guidance on strong sales, higher profits

General Motors beat first-quarter profit estimates and raised its full-year earnings and cash-flow guidance after vehicle demand at the start of the year surpassed expectations. Its shares rose in premarket trading. GM made $2.21 a share in adjusted profit in the first quarter, compared to a consensus forecast of $1.72 a share. Revenue rose 11% to $39.99 billion, it said Tuesday, which was more than the $39.24 billion analysts expected. The stronger results stem from rising sales in the US, even in the face of higher interest rates and inflation. GM executives said demand was strong enough to revise 2023 guidance upward, boosting profit estimates for the year by $500 million to between $11 billion and $13 billion. “We did it with strong production and inventory discipline and consistent pricing,” GM Chief Financial Officer Paul Jacobson said on a call with journalists. “All in all, weÂ’re feeling confident about 2023.” The Detroit automaker raised per-share full-year guidance to between $6.35 and $7.35, up from $6 to $7 a share, and said free cash flow would also increase by $500 million to a range of $5.5 billion to $7.5 billion.  GMÂ’s shares pared a gain of as much as 4.4% before the start of regular trading Tuesday, rising 3.5% to $35.50 as of 6:55 a.m. in New York. The stock was up 1.9% for the year as of the close on Monday.  North American Strength The automakerÂ’s sales were particularly strong in North America, where first-quarter earnings rose before interest and taxes rose to $3.6 billion. Vehicle sales rose 18% to 707,000 in the region. Jacobson said the company originally expected to sell 15 million vehicles in the US this year, slightly less than the 15.5 million annualized rate automakers foresaw in the first quarter. North American demand was enough to offset a weak performance in China, GMÂ’s second-largest market. The automaker continues to struggle in the country, where its vehicle sales fell 25% to 462,000 vehicles in the quarter. Profits from its joint ventures in the market slumped 65% to $83 million.  The market has struggled overall in the wake of Covid-19 restrictions and foreign automakers have had to overcome a growing preference for Chinese brands by competing on price, squeezing profit margins. The situation in China probably wonÂ’t significantly improve until the second half of the year, according to Jacobson. GM remains on target to sell 150,000 electric vehicles this year, the CFO said.

Recharge Wrap-up: Chevy Volt's new, improved powertrain; Inabikari wants to build Tesla Model X fighter

We knew the 2016 Chevrolet Volt's new powertrain would provide more range, but we didn't know how much. According to GM's Executive Director Larry Nitz, it is about 12 percent more, overall. "I can't think of a powertrain we've re-engineered more extensively within a five-year period than this one," he said. The battery, electric drive system and gasoline generator have all been reworked to allow for an overall driving range of up to 425 miles, with electric range speculated to reach 42 miles or more. The new Volt will also benefit from 20 percent quicker low-end acceleration, weight reductions and improvements in NVH. Read more at Hybrid Cars and at the SAE website. Hyundai's FCEV research and development boss, Dr. Sae-Hoon Kim, is optimistic about the future of hydrogen mobility in Japan. With the Tucson Fuel Cell already in production ahead of Toyota's FCV, Hyundai has a foothold in the hydrogen car scene. Kim believes that since the Fukushima disaster, Japan's attitudes toward energy make it friendly to a growing hydrogen economy. He also says that hydrogen won't be limited to Hyundai, with Kia getting all the battery EVs. "Both types are for both companies," Kim says. "For the moment, volumes are small and it is not wise to have Hyundai and Kia competing." Read more at Just Auto. The Latvian/German startup Inabikari is using crowdfunding to build an electric crossover for Europe. The Rev.01 EV hopes to compete with Tesla's upcoming Model X with a range of over 400 miles and a five-second 0-60 time. The group currently is trying to raise initial funds through an Indiegogo campaign, with hopes of more investment in the future and sales beginning in 2017. See the video below, and read more at Hybrid Cars and at the Inabikari website. Fuel economy and emissions regulations could lead to some interesting design changes to automobiles. The World Light Duty Test Procedure, set to replace the New European Driving Cycle in 2017, will push automakers to find new ways to reduce drag on their vehicles. For better aerodynamics, we could see traditional side-view mirrors replaced by cameras that display what they see on screens inside the vehicle. Another likely change will be the introduction of smaller, narrower wheels. Improving the average drag coefficient from 0.32 to 0.20 could reduce CO2 emissions by as much as 20 percent. Read more at Automotive News Europe.

GM laying off 500 workers to slow Chevy Sonic production

Due to slow sales of the Chevrolet Sonic and Buick Verano, General Motors is cutting a shift at the Orion Township plant that builds the pair. The move lays off about 500 workers, but most of them are expected to get offers to transfer to other factories, Automotive News reports. The move came just a day after GM announced adding 1,200 employees to the Detroit-Hamtramck plant. GM has been trying all year at the Orion Township factory to align production of the Sonic and Verano with their demand. The automaker first attempted idling the plant several times and eventually resorted to laying off about 100 workers. It also reduced the production rate there. With the huge rise in popularity of crossovers, demand for the plant's small cars is on the downturn. According to Automotive News, there's currently a 116-day supply of Sonics and 100 days of Veranos to sell. Delivers tell a similar tale because the Chevy is off 35.2 percent from January to September, and the Buick does little better with a 27.2 percent drop from the same period last year. While the situation at Orion Township might look rough now, big things are on the horizon. Soon, the new Chevy Bolt electric vehicle will be built there when it hits the market around 2017. Plus, the plant will also get a $245-million upgrade and 300 new jobs for another, unannounced vehicle.