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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.

GM to idle car production at five factories as Americans continue CUV love affair

In case you needed another reminder that Americans have fallen out of love with sedans, General Motors today announced plans to idle five factories in January in a bid to cut its inventory to 70 days. Detroit-Hamtramck Assembly ( Buick LaCrosse, Cadillac CT6, Chevrolet Volt and Impala) and Fairfax Assembly in Kansas ( Chevy Malibu) will stop production for three weeks. Lansing Grand River ( Cadillac ATS and CTS, and Chevy Camaro) is going down for two weeks, while Lordstown, OH ( Chevy Cruze) and Bowling Green, KY ( Chevy Corvette) will go idle for a week each, Automotive News reports. GM's shutdown reflects a broader problem with the company's supply – at 847,000 vehicles, the company's supply increased unsteadily from a low of 629,000 units in January of 2016. That's more than a 25 percent increase in the past year. Citing information from Autodata, The Detroit News reports that at the end of November, GM had a 168-day supply of LaCrosses, 177 days' worth of Camaro, 170 days of Corvette, 121 days for Cruze, 119 days for ATS, 132 days for CTS, and 110 days of CT6. Meanwhile, inventory of the company's more popular vehicles is actually below the professionally accepted 60- to 70-day supply, The News reports. The Trax, Colorado pickup, and GM's full-size SUVs are sitting below 50 days and experiencing year-over-year sales increases. GM needs a rethink of its inventory levels, which is something that's apparently coming. "We're going to be responsible in managing our inventory levels," GM spokesman Jim Cain told The News. Another unnamed spokesman told Automotive News the company's day-to-day supplies would "fluctuate before moderating at year-end." But at least one analyst thinks this won't be the last time Detroit needs to stop production to level things out. "Incentives are elevated, residuals are declining, and rates are rising," Brian Johnson, an analyst with Barclays, told The News. "And while GM in particular may benefit in the months ahead from new product launches, it's important to recognize that GM's inventory is elevated at the moment, and it wouldn't surprise us if they need to announce another production cut – which could pressure the stock." Related Video: News Source: The Detroit News, Automotive News - sub. req.Image Credit: Paul Sancya / AP Plants/Manufacturing Buick Cadillac Chevrolet GM GMC Crossover SUV Sedan bowling green cadillac xt6 fairfax

GM throttles back Chevy Malibu, Buick LaCrosse production over swollen inventories

As inventory of the Chevrolet Malibu and Buick LaCrosse continues to pile up, General Motors will be idling its Fairfax Assembly Plant for two weeks, according to Automotive News. This move comes about a month after the plant was shut down for three weeks in late December and early January for the same reason. As of January 31, the GM had a 94-day supply of Malibu stock while the LaCrosse was a little worse with a 117-day supply.
Just last week, GM announced that it would be investing $600 million in upgrading this plant, but it's unclear what future plans the company has in store for Fairfax considering slow sales of both the plant's models. We do expect a refreshed and more luxurious LaCrosse shortly and an early design update for the Malibu to be announced at some point this year, although we have had no official word as to when either will happen.