WORLD> America
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WORLD> America
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GM shares drop to 58-year low, global risks eyed
(Agencies)
Updated: 2008-10-10 13:48 GM, the largest US-based automaker, posted a $15.5 billion net loss in the second quarter and plans to increase production of more fuel-efficient cars in North America to adjust to dropping demand for pickups and SUVs.
Striking the right production balance between cars and trucks is hard. Credit Suisse believes GM and Ford may have to dial back on passenger car production in the coming months. GM could be expected to update its liquidity plans when it posts third-quarter results. It has not said when it will report its earnings. Analysts and auto executives cut US light vehicle sales forecasts for 2008 and 2009 as high gas prices buffeted sales of large vehicles earlier in the year and the credit crisis further weighed on consumer confidence. More recently, there have been signs of slowing in mature European markets and more moderate growth expectations for emerging markets where automakers had aimed resources. GM, which posted a 1.9 percent sales decline in Europe through the first nine months of 2008, and Ford have relied, to some extent, on growth outside North America to support them as they restructure at home. Industry forecasters J.D. Power and Global Insight have lowered expectations for 2008 US light vehicle sales and predict a slow recovery. They have also questioned sector growth in key regions overseas. "While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse," said Jeff Schuster, J.D. Power's executive director of automotive forecasting. In the United States, J.D. Power expects 2009 industry sales of 13.2 million, while Global Insight expects 13.4 million. US auto sales were roughly 16.15 million units in 2007. |
