General Motors expects positive results as supply chain strains ease

Author : Pankaj Singh | Published Date : 2021-12-03 

Chief Financial Officer of General Motors Co., Paul Jacobson, reportedly stated that the carmaker expects full-year adjusted pre-tax profits to be around USD 14 billion, higher than the previous prediction of USD 11.5 billion to USD 13.5 billion.

Strong consumer demand, high vehicle prices, and stable semiconductor supply are contributing to GM's robust financial performance, said Jacobson. The company shares went up by 2.5% following Jacobson's announcement.

However, he emphasized that the firm’s vehicle production and inventory will not return to normal until late 2022.

Tight inventories encourage higher prices, but GM and its competitors are still trying to strike a balance between maintaining a stock of vehicles, as in the past, but far too less for the U.S. market where many consumers still buy what's available on a dealer lot.

The carmaker is also grappling with higher commodity costs for its vehicles. They have observed inflation everywhere, Jacobson remarked.

The CFO also mentioned that the novel Omicron coronavirus variant has had little impact so far. They are sticking to the protocols that have proven to be effective.

As they strive to catch up to leading EV maker Tesla Inc. and compete with rivals such as Ford Motor Co and Volkswagen AG, Jacobson said GM will be proactive in investing in electric vehicles and other technology.

He believes that the automaker will rather develop a battery factory that stands idle for two or three years than be caught short on battery capacity. He further stated that they increase spending to speed up electric vehicle programs or invest in better technology.

A strong recovery from the pandemic and aggressive plans to double revenue by 2030 has helped GM push its market value to USD 84 billion, however, it is not even close to Tesla’s USD 1 trillion value.

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Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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