[Asia Economy Reporter Yujin Cho] General Motors (GM) of the United States posted better-than-expected surprise earnings despite the global economic downturn.
On the 31st (local time), GM announced in its earnings report that its fourth-quarter revenue increased by 28% year-on-year to $43.1 billion. Net profit surged 15% from $1.7 billion in the same period last year to $2.0 billion. Both revenue and net profit significantly exceeded Wall Street expectations, delivering strong results.
The company explained that the fourth-quarter revenue growth was driven by strong demand and improved supply chain conditions. In particular, Chevrolet and GMC solidified their positions as clear leaders in the U.S. pickup truck and large sport utility vehicle (SUV) markets, leading to increased sales.
In a letter to shareholders on the same day, GM stated, "The electric vehicles Chevrolet Bolt EV and Bolt EUV recorded record sales in the second half of last year," adding, "We have confirmed the potential success of mid-to-low priced models in the electric vehicle market." GM plans to increase its global electric vehicle production to over 70,000 units this year.
GM also announced plans for upfront investments to secure competitiveness in the electric vehicle market. Mary Barra, GM Chairperson and CEO, said, "As part of the Nevada mining development plan to secure the electric vehicle battery supply chain, we made a $650 million equity investment in Lithium Americas (LAC), a U.S. lithium mining specialist."
However, considering global economic uncertainties, the company added that it plans to reduce costs by a total of $2 billion over the next two years, including this year and next.
GM shares, listed on the New York Stock Exchange (NYSE), rose more than 7% on the day following the strong earnings report.
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